globalising intellectual property rights

Globalising Intellectual Property Rights T he TRIPs Agreement

Duncan Matthews

London and New York

Globalising IntellectualProperty Rights

The World Trade Organisation has responsibility for intellectual propertyrights – including patents, copyrights and trademarks – on a global scaleunder the auspices of the TRIPs Agreement (Trade-Related Aspects ofIntellectual Property Rights). This Agreement has profound implications forthe commercial interests of global corporate actors and for access totechnology in developing countries.

In Globalising Intellectual Property Rights, Matthews looks at variousaspects of the TRIPs Agreement – agenda-setting, legal interpretation,implementation, enforcement and revision – from the viewpoint of both globalbusiness interests and developing countries. It is argued that the Agreementwas largely the result of an initiative by multinational companies who soughtto protect their own intellectual property rights through international lawand, furthermore, that it is these multinational companies who are now itsmain guardians. The book concludes that the history of the TRIPs Agreementand the role of business is a clear example of governance by non-state actorson a global scale.

This book will be of interest to students and researchers in the fields ofinternational relations, intellectual property law, international economic lawand development studies.

Duncan Matthews is a lecturer in the School of Law at the University ofWarwick. He has written widely on intellectual property rights, environmentalpolicy and the single European market.

Routledge/Warwick Studies in Globalisation

Edited by Richard Higgott and published in association with the Centre forthe Study of Globalisation and Regionalisation, University of Warwick.

What is globalisation and does it matter? How can we measure it? What areits policy implications? The Centre for the Study of Globalisation andRegionalisation at the University of Warwick is an international site for thestudy of key questions such as these in the theory and practice of globalisationand regionalisation. Its agenda is avowedly interdisciplinary. The work of theCentre will be showcased in this new series.

This series comprises two strands:

Warwick Studies in Globalisation addresses the needs of students and teachers,and the titles will be published in hardback and paperback. Titles include:

Globalisation and the Asia–PacificContested territoriesEdited by Kris Olds, Peter Dicken, Phillip F. Kelly, Lily Kong andHenry Wai-chung Yeung

Regulating the Global Information SocietyEdited by Christopher Marsden

Banking on KnowledgeThe genesis of the global development networkEdited by Diane Stone

Historical Materialism and GlobalisationEssays on continuity and changeEdited by Hazel Smith and Mark Rupert

Civil Society and Global FinanceEdited by Jan Aart Scholte with Albrecht Schnabel

Towards a Global PolityEdited by Morten Ougaard and Richard Higgott

GLOBALISATION AND

REGIONALISATION

STUDY OF

CENTRE FOR THE

Routledge/Warwick Studies in Globalisation is a forum for innovative new researchintended for a high-level specialist readership, and the titles will be availablein hardback only. Titles include:

1 Non-State Actors and Authority in the Global SystemEdited by Richard Higgott, Geoffrey Underhill and Andreas Bieler

2 Globalisation and Enlargement of the European UnionAustrian and Swedish social forces in the struggle over membershipAndreas Bieler

3 Rethinking EmpowermentGender and development in a global/local worldEdited by Jane L. Parpart, Shirin M. Rai and Kathleen A. Staudt

4 Globalising Intellectual Property RightsThe TRIPs AgreementDuncan Matthews

Globalising IntellectualProperty RightsThe TRIPs Agreement

Duncan Matthews

London and New York

First published 2002 by Routledge11 New Fetter Lane, London EC4P 4EE

Simultaneously published in the USA and Canadaby Routledge29 West 35th Street, New York, NY 10001

Routledge is an imprint of the Taylor & Francis Group

© 2002 Duncan Matthews

All rights reserved. No part of this book may be reprinted orreproduced or utilized in any form or by any electronic,mechanical, or other means, now known or hereafterinvented, including photocopying and recording, or in anyinformation storage or retrieval system, without permissionin writing from the publishers.

British Library Cataloguing in Publication DataA catalogue record for this book is available from the BritishLibrary

Library of Congress Cataloging in Publication DataA catalog record for this book has been requested

ISBN 0–415–22327–X

This edition published in the Taylor & Francis e-Library, 2003.

ISBN 0-203-16568-3 Master e-book ISBN

ISBN 0-203-26025-2 (Adobe eReader Format) (Print Edition)

Contents

Series editor’s preface ixAcknowledgements xiAbbreviations xiii

Introduction 1

1 Origins of the TRIPs Agreement 7

2 Negotiating the TRIPs Agreement 29

3 Content of the TRIPs Agreement 46

4 Implementing the TRIPs Agreement 78

5 Impact of the TRIPs Agreement on developing countries 108

6 Future of the TRIPs Agreement 123

Appendix: full text of the Agreement on Trade-RelatedAspects of Intellectual Property Rights(the TRIPs Agreement) 140

Notes 175Bibliography 189Index 196

Series editor’s preface

The Centre for the Study of Globalisation and Regionalisation (CSGR)(www.csgr.org), founded in October 1997, is funded by the Economic and SocialResearch Council (ESRC) of the United Kingdom. It has rapidly become aninternational site for the study of key issues in the theory and practice ofglobalisation and regionalisation. The Centre’s agenda is avowedlyinterdisciplinary: research staff are drawn from international relations,political science, economics, law and sociology. Committed to scholarlyexcellence, the Centre also strives to be problem-solving in methodologicalorientation.

Three broad categories of activity inform and underwrite the researchprogramme of the Centre: (a) What is globalisation? (b) Can we measure itsimpacts, and if so, how? and (c) What are its policy implications?Understandings of globalisation are seen to be multidimensional – political,economic, cultural and ideological – so CSGR sees globalisation in at leasttwo broad ways. First, as the emergence of a set of sequences and processesthat are increasingly unhindered by territorial or jurisdictional barriers, andwhich enhance the spread of transborder practices in economic, political,cultural and social domains. Second, as a discourse of political and economicknowledge offering one view of how to make the postmodern worldmanageable. For many, globalisation as ‘knowledge’ (both accepted andcontested) constitutes a new reality. Centre research asks what kinds ofconstraints globalisation poses for independent policy initiative on the partof national policy-makers, and under what conditions these constraints areenhanced or mitigated.

Within these broad contexts, empirical work at CSGR focuses on:

1 particular regional projects in Europe, North America and the Asia–Pacific;

2 the enhancement of international institutions, rules and policycompetence on questions of trade competition and international financeand investment; and

3 normative questions about governance, sovereignty, democratisation andpolicy-making under the constraints of globalisation.

x Series editor’s preface

Indeed, Centre research is sensitive to the wider normative nature of thesequestions, especially when considering the counter-tendencies towards, orsites of resistance to, globalisation at international, regional and local levelsthat give rise to different understandings of the importance of space andterritoriality. Routledge/Warwick Studies in Globalisation provides an avenue forthe publication of scholarly research monographs, policy-oriented studies andcollections of original themed essays in the area of the research agenda ofCSGR.

Duncan Matthews’ book, the tenth in the series, looks at one of the majorinternational institutions central to contemporary globalisation studies – theWorld Trade Organisation. Specifically, it explores the reasons behindintellectual property rights becoming a key issue for international trade, andexamines how a consensus in favour of global action was achieved. It explainsthat, although the signatories to the TRIPs Agreement were WTO Membercountries, non-state actors in the form of multinational companies played acrucial role in securing the inclusion of intellectual property rights withinthe WTO framework. However, Matthews goes on to demonstrate thepotential for the TRIPs Agreement to have an adverse impact on developingcountries, and the manner in which this is now becoming more widelyunderstood, particularly in relation to access to affordable medicines.

This book examines a range of reasons that explain why the TRIPsAgreement consensus is under increasing pressure, including developingcountry opposition; strains in the relationship between the United Statesand Europe; a fragmentation of the corporate alliances that encouragedadoption of the TRIPs Agreement in the first place; and the role of new actorswhose views were peripheral to the original negotiations, such as non-governmental organisations and institutions including the World HealthOrganization. The book concludes that pressure on the TRIPs Agreementconsensus is likely to have profound implications for renegotiation of theWTO’s intellectual property provisions during the Doha Development Roundof multilateral trade negotiations. This book is timely in the extreme.

Richard HiggottWarwick

February 2002

Acknowledgements

The appearance of this book within the Routledge series Warwick Studies inGlobalisation is no coincidence. The book was conceived and researched underthe auspices of the University of Warwick’s ESRC Centre for the Study ofGlobalisation and Regionalisation and adopts many of the themes that havebeen prevalent in the early work of the Centre: the role of non-state actors inthe process of globalisation; the regional impact of globalisation; the impactof globalisation on economically disadvantaged sections of civil society; and,above all, a multidisciplinary approach to the study of globalisation (in thiscase encompassing both law and politics).

I would like to thank the Economic and Social Research Council forgenerously funding the research for this project within the ESRC Centre forthe Study of Globalisation and Regionalisation at the University of Warwickin 1998. I would also like to thank the School of Law at the University ofWarwick for granting leave from my teaching responsibilities to allow thewriting of this book in 2001. Many colleagues and scholars have providedencouragement and helpful advice in the preparation of this work. I wouldparticularly like to thank Richard Higgott, Susan Strange, Mike McConville,Andy Clark, Julio Faundez, Abdul Paliwala, Susan Sell, Peter Drahos andChris May. Special thanks must also go to Nicola Harwood, Law Librarian atthe University of Warwick, for skill and enthusiasm in applying her knowledgeof electronic databases to locate documents so efficiently. Carol Hughes andJill Southam provided invaluable secretarial support. Above all thanks go toLouise O’Reilly, who read and commented on the entire manuscript whilesimultaneously running Artpoint Trust.

I would also like to thank the individuals and organisations who assistedwith the research for this book by participating in face-to-face interviews, inparticular: John Beton of the UNICE and the Trans-Atlantic BusinessDialogue; David Bennett of Shell; Clive Bradley of the Publishers’ Association;Claude Burky and Angeline Hanson of the Office of the United States TradeRepresentative (USTR); Jerôme Chauvin of UNICE; Jacques Gorlin of theIntellectual Property Committee (IPC); Stephan Krawczyk of theInternational Federation of Phonographic Industries (IFPI); Raimund Raithof Directorate General External Affairs of the European Commission; Koos

xii Acknowledgements

Rasser of Procter and Gamble Inc.; John Reid of the Intellectual PropertyInstitute (IPI); Peter Richardson of Pfizer Inc.; David Roberts, Brian Russelland David Waters of GlaxoSmithKlein; Eric Smith of the InternationalIntellectual Property Alliance (IIPA); Stephen Smith, Ivor Brown and RogerPugsley of AstraZeneca; and Phil Thorpe of the Patent Office. I am extremelygrateful to each of these individuals and organisations but none should beheld responsible for any errors in this book, which remain entirely myresponsibility.

Considerable thanks must also go to my postgraduate students studyingfor the LL.M. in International Economic Law at the University of Warwick,who patiently endured my earlier attempts to present the arguments thatunderpin this book during weekly seminars on the Legal Aspects ofInternational Technology Transfer course and who contributed invaluableviews of the TRIPs Agreement by explaining their own experiences in theirhome countries. Without the enthusiasm and international perspective ofthese students, developing the main arguments of this book would not havebeen possible.

Finally, I would like to mention two academics whose views I hold in highesteem and whose words provide some justification for the liberties that Ihave taken in writing this book. First, Peter Drahos, who, on hearing of myintention to write this book, gave his enthusiastic encouragement with thecomment that far from unnecessarily duplicating earlier work (not least hisown), it is only by telling and retelling the story of the TRIPs Agreementthat an accurate picture of its origins and impact will emerge, thus giving methe confidence to write this book in the first place. Second, Paul Heald, who,by observing that the trademark provisions of the TRIPs Agreement lack‘sex appeal’ (by which he means a relative lack of controversy) when comparedwith those on patents and copyright (Heald: 1996: 637), gave me thejustification to follow through the decision that I had intuitively taken toconcentrate on patents and copyright for much of this book at the expense oftrademarks. I would like to thank Peter Drahos and Paul Heald for theirguidance, unintended or otherwise, and remain indebted to them both.

Duncan MatthewsOxford

November 2001

Abbreviations

ABPI Association of British Pharmaceutical IndustriesANDA Abbreviated New Drug ApprovalASEAN Association of South East Asian NationsBDI Federation of German IndustriesBSA Business Software AllianceCBI Confederation of British IndustriesCI ROAP Consumers International Regional Office for Asia and the PacificDSB Dispute Settlement BodyDSU Understanding on Rules and Procedures Governing the

Settlement of DisputesEC European CommunitiesEFPIA European Federation of Pharmaceutical Industry AssociationsEMEA European Medicines Evaluation AgencyFBI Federal Bureau of InvestigationFDA Food and Drug AgencyFDI Foreign Direct InvestmentGATT General Agreement on Tariffs and TradeGSP Generalized System of PreferencesIFAC Industry Functional Advisory CommitteeIFPI International Federation of Phonographic IndustriesIIPA International Intellectual Property AllianceINTA International Trademark AssociationIPC Intellectual Property CommitteeIPO Intellectual Property OwnersISACs Industry Specific Advisory CommitteesITC International Trade CommissionMITI Japanese Ministry of International Trade and IndustryMPAA Motion Picture Association of AmericaNGO Non-governmental organisationNMPA National Music Publishers’ AssociationPHARE Poland and Hungary: Aid for Economic RestructuringPhRMA Pharmaceutical Research and Manufacturers of AmericaRIAA Recording Industry Association of America

xiv Abbreviations

SACIP Standing Committee on Industrial PropertyTABD Transatlantic Business DialogueTACIS Technical Assistance to the Commonwealth of Independent States

and MongoliaTRIPs Agreement on Trade-Related Aspects of Intellectual Property

RightsTPRG Trade Policy Review GroupTPSC Trade Policy Staff CommitteeUCC Universal Copyright ConventionUN United NationsUNCTAD United Nations Conference on Trade and DevelopmentUN/ECE United Nations Economic Commission for EuropeUNICE Union of Industrial and Employers’ Confederation of EuropeUS United StatesUSPTO United States Patent and Trademark OfficeUSTR Office of the United States Trade RepresentativeWHO World Health OrganizationWIPO World Intellectual Property OrganisationWTO World Trade Organisation

Introduction

This book concerns the globalisation of intellectual property rights throughthe World Trade Organisation (WTO) Agreement on Trade-Related Aspectsof Intellectual Property Rights (commonly referred to as the TRIPsAgreement). It is an account of the role played by global corporate actors(also known as multinational companies) in securing trade regulation capableof protecting global commercial interests to an extent not previously witnessedin relation to international protection of intellectual property rights. Thebook explains how a consensus in favour of global action was achieved acrossa range of industry sectors, how a coherent strategy of industry allianceslinked to government action then emerged, most visibly in the United Statesbut also in Europe and Japan, and how a willingness to engage in forumshifting from bilateral to multilateral action, coupled with a negotiatingadvantage over developing countries in terms of intellectual propertyexpertise, led to a successful outcome to the Uruguay Round of GATT(General Agreement on Tariffs and Trade) negotiations as far as globalbusiness interests were concerned.

In the light of the Uruguay Round negotiations that secured a TRIPsAgreement, the book argues that global corporate actors have also played animportant role in ensuring the effective implementation of the Agreementin each WTO Member country through surveillance carried out by their localbranches and agents. But as the adverse effects of the TRIPs Agreementbegin to be felt in developing countries, opposition to the Agreement hasbecome more vocal. Again, it is global corporate actors that have sought tocounter opposition to intellectual property protection by using a mix ofstrategies, ranging from assistance and educational programmes to economiccoercion and recourse to legal proceedings under both the civil and thecriminal provisions of developing countries’ national law.

The book argues, however, that at a time when the impact of the TRIPsAgreement is becoming more widely understood in the developing world,the concentration of global business interests that achieved so much insecuring the Agreement during the Uruguay Round negotiations is now underpressure that may result in its fragmentation. The reasons for fragmentationof the global consensus among corporate actors are examined in detail. First,

2 Introduction

the book identifies institutions in the United States and Europe as playing asignificant role as gatekeepers that must balance the intellectual propertyconcerns of business against wider priorities in international diplomacy. Onseveral occasions, the result is that corporate complaints identifyinginadequate intellectual property protection in developing countries have notbeen taken up by their home governments because of more pressing concernsrelating to national security, political stability and economic development.Second, the book suggests that the consensus between the United States andEurope has started to erode as a result of disputes relating to the continueduse of bilateral trade sanctions by the United States and as a result of anongoing disagreement about the most appropriate mechanism to be used forascertaining the priority date for patent applications (first-to-invent or thefirst-to-file). Third, there has been a fragmentation of the cross-sector industryconsensus that enabled business support for the TRIPs Agreement to appearso unequivocal in the first place. Fourth, new actors whose views wereperipheral to the Uruguay Round negotiations have now entered the debateon global intellectual property protection more wholeheartedly in the wakeof a wider understanding of the impact of the TRIPs Agreement. These newactors include industry groups, such as generic drug manufacturers, that didnot participate in the original negotiations; civil society groups, includingnon-governmental organisations (NGOs), farmers’ groups and representativesof indigenous peoples that are raising awareness of the potential for adverseeffects arising from the Agreement in terms of poverty and biodiversity; globalinstitutions, such as the United Nations Conference on Trade andDevelopment (UNCTAD) and the World Health Organization (WHO), thathave to some extent shared the concerns of civil society groups; and developingcountries themselves who, through information deficiencies and lack ofresources during the Uruguay Round negotiations, did not fully envisage thefar-reaching effect of the TRIPs Agreement and are now seekingrenegotiation. Finally there are indications that, in interpreting the scopeand meaning of the Agreement, WTO Dispute Settlement Panels themselvesmight be prepared to support a narrower interpretation of the TRIPsAgreement enforcement than global corporate actors envisaged, this narrowerinterpretation being restricted to flagrant violations as opposed, for example,to more general complaints that the ‘legitimate expectations’ of globalcorporate actors are not being met by the particular form of nationalimplementing measure introduced to meet the requirements of the TRIPsAgreement.

It is against this background that the book sets the scene for anyrenegotiation of the TRIPs Agreement, particularly during the forthcomingDoha Development Round of trade negotiations between WTO Members,identifying the likely negotiating platforms of key players and the range ofissues likely to be at the forefront of future deliberations on internationalintellectual property protection. The book examines the prospects for issuesunresolved at the end of the Uruguay Round by virtue of being included but

Introduction 3

left open for review or omitted from the TRIPs Agreement altogether, assessesthe likelihood of new issues being added (particularly in relation tobiodiversity, indigenous knowledge and electronic commerce) and suggeststhat maintenance of the current text, with no substantive revision of theTRIPs Agreement, is the most likely outcome, but with amendmentsfavourable to developing countries also a possibility.

At the outset it must be acknowledged that a great deal has already beenwritten about the TRIPs Agreement and much of that excellent work isreferenced in the text of this book. Chapters 1 and 2 trace the origins andnegotiating history of the TRIPs Agreement. Earlier accounts of these eventshave tended to focus, on the one hand, on an analysis of official documentsreleased at the end of the GATT Uruguay Round negotiations establishingthe WTO and, on the other, on accounts of how and why business interests inthe United States came to be mobilised so as to lobby for intellectual propertyprotection on a global scale once the economic implications of widespreadinternational piracy and counterfeiting became apparent from the early 1980sonwards. But in researching this book my initial concern was that theseaccounts, many of which provide entirely accurate versions of events in so faras they go, did not offer a complete picture of the events leading up to theTRIPs Agreement. By focusing on the undoubtedly significant role played bydifferent US actors (individuals, corporations and business groups) ininitiating and negotiating a new international agreement on the protectionof intellectual property rights, American scholars have done a great deal torelate their side of the story. What has been underplayed in these accounts isa global perspective to counterbalance the US viewpoint – a recognition thatthere were also individuals, corporations and business groups outside theUnited States that played a significant role in laying the foundations for anew, global, regime for intellectual property protection in the twenty-firstcentury. Far from being a victory for the United States (and US businessinterests in particular) as some authors have tended to argue, Chapters 1and 2 suggest that once the whole picture of international corporatenetworking is revealed through an account of the relationships built betweenkey European, US and Japanese actors in initiating and negotiating the TRIPsAgreement, we are presented with a classic example not of US corporatehegemony, but of global business identifying global obstacles to obtaining asecure international trading environment for their goods and services. Withentire business sectors collaborating on a global scale and responding to theimperative of intellectual property protection in a coordinated way throughlobbying and business group activity, corporate actors paved the way for theinclusion of intellectual property rights in the Uruguay Round tradenegotiations and, ultimately, the adoption of new global regulation in theform of the TRIPs Agreement as part of the package of measures nowadministered by the WTO.

What this book implies is that only once the raison d’être of the TRIPsAgreement has been fully acknowledged by recognising the significance of

4 Introduction

the consensus achieved among global corporate actors and business groups,and only once the origins and negotiating history of the Agreement havebeen understood in this way, can an interpretation of the main provisions ofthe TRIPs Agreement then be undertaken. This interpretation is undertakenin Chapter 3 with a provision-by-provision analysis of the text of the TRIPsAgreement elucidating its key components and indicating those measureswhich proved controversial during the Uruguay Round negotiations, oftenprecisely because they ran counter to business practice and commercialexpectation among global corporate actors or, conversely, because theyamounted to representations of business priorities that were often opposedby developing country delegations to the GATT negotiations.

Once the final version of the TRIPs Agreement had been adopted at theend of the Uruguay Round, the significance of global actors and interests insecuring the TRIPs Agreement did not stop. Chapter 4 describes how,following adoption of the TRIPs Agreement, scholarly attention has tendedto shift to an assessment of whether the Agreement is now being effectivelyenforced, as a prerequisite for the intended outcomes of international legalobligations being achieved in practice. In this respect, there has been anexpectation that the Members of the WTO, namely those countries (notbusinesses) that are signatories to the Uruguay Round agreements, will bringcomplaints about implementation of the TRIPs Agreement in the territoriesof other WTO Members before the WTO body responsible for scrutiny andtransparency, the TRIPs Council, or through the formal Dispute SettlementProcedure of the WTO. But, although this shift in scholarly focus is laudableat the level of black letter law, in practice the corporate actors and businessgroups that provided the original stimulus for the TRIPs Agreement havethemselves no right to be heard before the WTO. Because businesses do nothave locus standi before the WTO, the continued significance of corporateinterests in ensuring appropriate application of international intellectualproperty protection has tended to be overshadowed by the predominant focuson WTO Member countries and the formal aspects of WTO procedures.Chapter 4 seeks to redress this balance.

Following through the theme of highlighting the significant role playedby global corporate actors, the book explains that this relates not only to thenegotiation of the TRIPs Agreement, but also to the continuing efforts tomonitor its application in foreign markets. Chapter 4 suggests that, in manyinstances, it is the very same companies and business groups that lobbied sohard to initially encourage adoption of the TRIPs Agreement that are nowacting as the eyes and ears of developed country WTO Members in terms ofglobal monitoring of national implementing legislation and administrativeprocedures on the ground. While government administrations in developedcountries (particularly the United States and the European Communities)1

rarely possess the resources to seek out instances of inadequateimplementation of the TRIPs Agreement in foreign jurisdictions in anyconcerted way, it is frequently global corporate actors that bring the concerns

Introduction 5

of their local agents, branches and subsidiaries to the attention of theappropriate government agencies via the Office of the United States TradeRepresentative (USTR) and/or the European Commission. Corporatepressure is then exerted on the appropriate public sector officials with a viewto resolving TRIPs implementation problems in foreign markets throughbilateral trade dialogue, through the TRIPs Council or, ultimately, throughthe Dispute Settlement Procedure of the WTO. It is global business that liesat the heart of these activities and continues to play a pivotal role in ensuringthe practical application of the TRIPs Agreement but, crucially, it isgovernmental institutions such as the USTR and the European Commissionthat act as ‘gatekeepers’ in deciding which complaints to take forward.

Chapter 4 also examines the significance of corporate involvement in anumber of the earliest complaints relating to the TRIPs Agreement thathave been brought by WTO Members before the Dispute SettlementProcedure in particular. There is evidence, in this respect, of at least twoemerging trends that challenge the interests of global corporate actors: first,a narrowing in the interpretation of what global corporate actors maylegitimately expect under the terms of the TRIPs Agreement is apparent inthe Appellate Report of the US–India Mailbox Panel; second, it is clear fromthe EC–Canada Bolar/Stockpiling Panel and associated activity in Israel andCyprus that generic drug manufacturers are encouraging WTO Members tooperate at the boundaries of permissible acts under the provisions of theTRIPs Agreement in order to achieve competitive advantage for their nationalindustries.

For developing countries, where in many instances adherence tointernational standards of intellectual property protection had not beenpresent before the Agreement, the implications of WTO surveillance andenforcement mechanisms relating to the TRIPs Agreement are likely to befar-reaching. Opposition to the TRIPs Agreement is growing among civilsociety groups and NGOs concerned with biodiversity, farmers’ rights to re-use and plant seeds from their crops, and the rights of indigenous peoples toprevent global corporate actors appropriating traditional knowledge. Thegrowth of opposition to the TRIPs Agreement among these groups raises theprospect of fragmentation of the delicate balance of interests that made theAgreement achievable at all during the Uruguay Round. Given the likelyimpact of the TRIPs Agreement on developing countries and the possibleimplications for future renegotiation of the Agreement, global corporateactors have stressed the role of intellectual property protection in facilitatingeconomic development through technology transfer and inward investment.Chapter 5 acknowledges that the potential benefits of the TRIPs Agreementthat have been predicted by global corporate actors in terms of attractinghigher levels of foreign direct investment and encouraging localentrepreneurship as a result of improved standards of domestic intellectualproperty law must be balanced against the likelihood of higher costs(particularly for proprietary pharmaceutical products and educational

6 Introduction

materials) that higher standards of patent protection and copyright imply.This raises the possibility that the adverse effects of the TRIPs Agreementwill outweigh the benefits for developing countries, a view shared by asignificant number of commentators, and the grounds for their pessimisticpredictions will receive further attention, not least because they are a likelyfocus for opposition to the Agreement in any forthcoming renegotiation ofits provisions.

Chapter 6 concludes the book by assessing the future prospects for theTRIPs Agreement in more detail. It suggests that it is only against thebackground of understanding global corporate actors that full considerationcan be given to any future renegotiation of the TRIPs Agreement. Globalcorporate actors will continue to play a pivotal role. Their interests are likelyto be at the forefront of developed country perspectives on futurerequirements of international intellectual property protection. Multinationalcompanies and developed country governments are well advanced in theirproposals for further tightening of the text of the Agreement. But, the bookconcludes, the concentration of interests that led to the inclusion ofintellectual property protection in the package of deals achieved at the endof the Uruguay Round negotiations now shows signs of fragmentation. Thefragmentation of interests is attributed to a range of factors internal andexternal to global corporate actors. Internal factors contributing to thefragmentation of the global corporate consensus include the prospect thatwider diplomatic issues will take priority over the imperative of rigorousinternational intellectual property protection among developed countrygovernments; differences of opinion between developed country governmentson the role of bilateral trade sanctions in the post-Uruguay Round era andthe debate over first-to-invent and first-to-file procedures for patentapplications that have gone some way towards undermining transatlanticrelations between the United States and Europe; and the differences inpriorities between industry sectors which are now more prominent than duringthe Uruguay Round. External pressures contributing to the fragmentationof the global corporate consensus in favour of the TRIPs Agreement includeresponsive behaviour from industry groups that did not participate in theformulation of the TRIPs Agreement, including the generic drug companies;civil society groups including NGOs, farmers and indigenous peoples;developing country governments; and global institutions such as UNCTADand the WHO. Dispute Settlement Panels of the WTO are also identified asa factor likely to limit the scope for interpretation of obligations under theTRIPs Agreement. The book concludes that these internal and externalpressures on the global corporate consensus are likely to hinder the tighteningup of the standards of worldwide intellectual property protection embodiedin the TRIPs Agreement, with the possibility of a weakening of those standardsalso apparent.

1 Origins of the TRIPsAgreement

Ministers of GATT met in Marrakesh on 12–15 April 1994 to conclude theUruguay Round of Multilateral Trade Negotiations that had begun in Puntadel Este nearly eight years earlier. At Marrakesh, 114 countries, togetherwith the European Communities,1 became signatories to the Final Actembodying the results of the Uruguay Round and parties to the Agreementestablishing the WTO, which came into effect on 1 January 1995. Signatories(the WTO Members) also became parties to the Agreement on Trade-RelatedAspects of Intellectual Property Rights (the TRIPs Agreement), annexed tothe WTO Agreement, as well as to thirteen Multilateral Agreements on Tradein Goods, a General Agreement on Trade in Services and a number of othermeasures, including an Understanding on the Settlement of Disputes.

This chapter describes the events that led to the inclusion of intellectualproperty protection as an agenda item during the Uruguay Roundnegotiations. It explores the reasons why intellectual property protectionbecame a key issue for international trade, reviews earlier multilateralattempts to link intellectual property to trade through multilateral andbilateral initiatives and, most crucially, examines how a consensus in favourof global action was achieved across a range of industry sectors. Moves towardsachievement of that consensus, led by key individuals in the businesscommunity, were motivated first by a strategy of encouraging use of bilateraltrade law in the United States as a means of encouraging other countries toprotect the intellectual property rights of multinational companies based inthe United States. Once that strategy had proved successful, global corporateactors shifted the forum for their efforts from domestic law to global tradelaw. In the United States, Europe and Japan, businesses exerted pressure ontheir governments to ensure that intellectual property became a globalcommercial issue and the focus of attention during the Uruguay Round ofGATT negotiations. These developments, discussed here, constitute theorigins of the TRIPs Agreement. Progress made towards intellectual propertyprotection subsequently during the GATT negotiations is then discussed inChapter 2, with later chapters dealing with the content of the TRIPsAgreement, its implementation, impact and future priorities. This chapterbegins by explaining the scope of intellectual property rights and the reasons

8 Origins of the TRIPs Agreement

why piracy and counterfeiting2 became such an important issue ininternational trade.

Perceptions of intellectual property rights

The term ‘intellectual property’ refers to a range of legal rights over newideas relating to patents, copyright and related rights, trademarks,geographical indications, industrial designs, layout designs of integratedcircuits and the protection of undisclosed information.3 As international tradehas developed and the significance of technology as a commodity of that tradehas increased (Doane 1994: 465), so an awareness of the importance ofintellectual property protection has also grown (see also Sell 1995: 163; May2000: 81). Today, intellectual property constitutes a valuable economic assetthat accounts for an ever greater ‘value added’ in high technology areas suchas the pharmaceutical4 and information technology industries, and inaudiovisual entertainment areas such as the music and cinema industries. Inthe pharmaceutical sector, for example, US and European companies investabout 20 per cent of their sales income in research and development with theaim of producing the next generation of medicinal products, this being byfar the highest level of investment of any industrial sector (according toYeutter, foreword to Gorlin 1999: ii). Unfortunately, high technology sectors,such as proprietary medicines, also produce commodities that have provedparticularly susceptible to misappropriation through piracy (Welch 1992: 41).

From a developed country perspective, for as long as there has been legalprotection of intellectual property rights there has also been a history ofmisappropriation of those rights through piracy (see also Halbert 1997: 55)and counterfeiting. The argument against allowing piracy and counterfeitingis that it amounts to theft, since rights are owned and right holders shouldbe allowed to recoup the investment they have made in terms of researchand development endeavours and/or intellectual creativity. Yet, from adeveloping country perspective, allowing the (mis)appropriation of rights isbased on perceptions of intellectual property rights as the common heritageof society, namely the view that humankind should have equal access to life-saving medicines, for example. Developing countries have also argued thatrecouping investment will in any case be achieved primarily from markets indeveloped countries, where consumers are more readily able to afford thehigher cost of products protected by intellectual property rights. Manydeveloping countries have tended to consider that the purpose of intellectualproperty rights was simply to reinforce the economic power of developednations and transfer wealth from poorer countries to richer ones (Worthy1996: 195).

The anti-counterfeiting code

The origins of the TRIPs Agreement as a manifestation of internationalintellectual property rights can be traced back to the late 1970s, when the

Origins of the TRIPs Agreement 9

growth of trade in counterfeit goods led to the mobilisation of corporate actorson a global scale with the formation of the Anti-counterfeiting Coalition, analliance of 100 multinational corporations with the common aim ofencouraging national governments to strengthen protection againstcounterfeit trademarked goods (see also Blakeney 1995: 77; Stewart 1993:2259). The Coalition provided an important industry input into the draftingof a code on anti-counterfeiting. During the Tokyo Round of the GATTbetween 1973 and 1979, trade in counterfeit goods had begun to emerge as aserious issue (see also Blakeney 1996a: 544; Bradley 1987: 64; Doane 1994:471; Emmert 1990: 1339) and was no longer simply considered an ‘acceptableobstacle’ to free trade (Gervais 1998: 8). Although attempts to agree commonrules to stop trade in counterfeit goods failed to receive widespread supportfrom other national delegations at the end of the Tokyo Round, the Coalitionencouraged the United States and the European Communities (see also Evans1994: 158; Stewart 1993: 2260) to continue their efforts and, in 1979, reachedagreement on a draft ‘Agreement on Measures to Discourage the Importationof Counterfeit Goods’.5 Under the draft code, contracting parties were toimplement measures to detain and seize counterfeit trademarked goods oncethe owner of the trademark demonstrated a right to protection by pastimportation or the likelihood of future importation (Stewart 1993: 2260).This proposal came too late to receive widespread support from otherdelegations to the Tokyo Round of GATT, particularly since there was a lackof evidence that international copyright infringement posed a real problemto business interests in developed countries and to the US economy (see alsoBlakeney 1996b: 1). Yet it was the absence of an international consensus tosupport the draft Agreement that paradoxically provided the stimulus forUS business to overcome the perceived lack of evidence of infringementsand galvanised corporate interests to support the common aim of gettingintellectual property protection on the agenda for the subsequent UruguayRound of GATT negotiations. Between 1980 and 1982 informal meetingswere conducted between representatives of key business interests andgovernment officials in the United States, the European Communities,Canada, Japan and Switzerland (Blakeney 1996b: 1; Stewart 1993: 2260),culminating in the submission of a revised version of the draft GATT anti-counterfeiting code.6

1982 GATT Ministerial Meeting

At the Ministerial Meeting of 1982, designed to address outstanding issuesthat had not been resolved at the end of the Tokyo Round, the United Statesdelegation advocated further negotiations, based on the revised version ofthe draft code, with the aim of belatedly achieving the adoption of amultilateral anti-counterfeiting code (Evans 1994: 159; Stewart 1993: 2261).However, the proposal still failed to attract wide support. Developingcountries, led by India and Brazil, questioned the need for an agreement onintellectual property rights within the GATT at all and argued that the World


Intellectual Property Organisation (WIPO) already offered an appropriatemultilateral forum for raising intellectual property standards and that theGATT, with its remit for trade in goods, had no jurisdiction over trademarkcounterfeiting (for a detailed account of developing country opposition toincluding intellectual property rights within the Uruguay Round agenda, seeBlakeney 1995: 78; 1996b: 2; Bradley 1987: 67; Stewart 1993: 2261).

Despite the continued misgivings of some developing countries, theMinisterial Declaration of 29 November 1982 requested the Director Generalof GATT to hold consultations with his counterpart at WIPO on legal andinstitutional aspects involved in trade in counterfeit goods7 (see Bradley 1987:67; Gervais 1998: 8). In 1984, at the fortieth Session of the GATT Council, itwas agreed that work concerning counterfeit goods would continue, the GATTCouncil appointing an Expert Group, which was to include a representativefrom WIPO and report its findings to the GATT Council (Stewart 1993: 2261–2). The Expert Group met on six occasions in 1985 (Gervais 1998: 8),culminating in a report on ‘Trade in Counterfeit Goods’,8 which set out theadequacy of national laws to attack the counterfeit problem; the authority ofthe GATT to act in this area; the methods available to the GATT; and theimpact of anti-counterfeiting on international trade (Stewart 1993: 2262).The Expert Group concluded that joint action was probably needed, but wasnot able to agree on whether the GATT was an appropriate forum for suchaction (Gervais 1998: 9). It recommended that it should be for the GATTCouncil to determine whether multilateral negotiations through the GATTframework would be appropriate. However, the report was criticised bydeveloping countries within the GATT Council itself on the grounds that theimpact of trademark counterfeiting could not actually be quantified (Blakeney1996b: 2). Other developing countries, led by India and Brazil, were of theview that WIPO rather than GATT was the appropriate forum for addressingcounterfeiting issues (Gervais 1998: 9). For developing countries, WIPO hadthe practical advantage of offering a forum where, owing to the system ofvoting, they could use their numerical advantage to better protect theirinterests (Evans 1994: 159).

Attempts to revise the WIPO conventions

WIPO had been established in 1967 as a United Nations (UN) agency toadminister the Paris and Berne conventions and to seek the harmonisationof national intellectual property laws.9 The Paris Convention for the Protectionof Industrial Property of 188310 and the Berne Convention for the Protectionof Literary and Artistic Works of 188611 were the result of attempts tocoordinate the international dimensions of intellectual property rights. Underthe Paris Convention, signatories12 agreed to provide national treatment forforeign works under domestic laws for patents, trademarks, industrial designs,trade names, appellations of origin and utility models. The Berne Conventionsets out similar provisions and minimum terms for copyrights.13 However,


these conventions lacked strong enforcement provisions, a problemexacerbated by the reluctance of developing countries to carry through theirobligations as signatories. This reluctance on the part of developing nationshad its origins in concerns that strong intellectual property rights would makethe acquisition of technology from the developed world prohibitively expensive(de Koning 1997: 64).

The TRIPs Agreement was therefore not an entirely new development ininternational economic law. In many respects, it was the successor to earlierWIPO-administered conventions (see also de Koning 1997: 71). Indeed, theTRIPs Agreement itself actually requires compliance with the Paris and Berneconventions (with the exception of Article 6bis of the Berne Conventionrelating to moral rights). But, as they stood, two main flaws were perceivedin the Paris and Berne conventions: first, the absence of detailed rules onenforcement rights before national judicial administrative authorities, and,second, the absence of a binding and effective mechanism to settle disputesbetween states (see also Gervais 1998: 9–10). The Paris and Berne conventionsalso suffered from the reluctance of some countries to become signatorieswhen they did not consider this to be in their national interest. For developedcountries, intellectual property was a private right that should be protectedas any tangible property, whereas for developing countries it was a publicgood that should be used to promote economic development (see also Stewart1993: 2255). These tensions underpinned the debate that took place fromthe late 1970s onwards about the future of the international intellectualproperty regime.

From the 1970s onwards, with increasingly vocal complaints from industryabout the growth in piracy of copyrighted works (Blakeney 1995: 76),developed countries attempted to revise and strengthen the WIPO intellectualproperty conventions (see Stewart 1993: 2249) in order to introduce effectiveenforcement mechanisms capable of combating international piracy andcounterfeiting of intellectual property. Attempts to revise the ParisConvention, however, became polarised. From the viewpoint of developedcountries, effective enforcement was needed to combat loss of revenue dueto piracy and counterfeiting, whereas developing nations wanted to seerevisions in the light of a report by the UN Conference on Trade andDevelopment (UNCTAD). UNCTAD had conducted a study of transfer oftechnology to developing nations14 and had concluded that 84 per cent ofpatents issued in developing countries were owned by nationals of fivecountries (the United States, Germany, France, Switzerland and the UK),whereas only 1 per cent of patents were owned by nationals of developingcountries within their own states (UNCTAD 1974). The UNCTAD reportprovided the stimulus to encourage developing countries to seek revisions tothe Paris Convention that would allow them to retain the use of compulsorylicences (a requirement that patents be worked locally, with the sanction of acompulsory order granting manufacturing rights to another party if the patentholder fails to meet this obligation).


With the positions of developed and developing countries polarised alongthese lines, signatories to the Paris Convention held inconclusive revisionconferences in Geneva (1980), Nairobi (1981) and Geneva (1982) in anunsuccessful attempt to overcome their differences.

The 1984 watershed

Parties to the Paris Convention met again in Geneva in 1984 in an attemptto agree to revisions. But negotiations broke down, with the entrenched viewsof developed and developing countries blocking any revision. Instead, theParis Convention remains in its last revised form following the Stockholmamendments of 1967 (for a detailed account of why negotiations to revisethe Paris Convention broke down in Geneva, see Sell 1998).

From the perspective of developed countries, 1984 marked a realisationthat they had failed in their attempts to strengthen the enforcementmechanisms of the Paris and Berne conventions. Moreover, attempts tointroduce common dispute settlement provisions to cover all WIPO treatieshad failed because signatories did not formally ratify the measures envisaged.By the mid-1980s it became clear that the differences between developedand developing country viewpoints of how national interests could best berepresented through international intellectual property systems werepolarised. From the viewpoint of developed countries, it was becomingincreasingly clear that there was a need to protect national industries frompiracy and counterfeiting in foreign markets. US companies found themselveshaving to compete with mass-produced unauthorised copies of their ownpatented, trademarked and copyrighted goods in both domestic and foreignmarkets (see Sell 1998: 132), whereas developing countries sought access tothe tools for achieving technological advancement and economic developmentthrough a relaxation of intellectual property rules (Stewart 1993: 2255). Bythe mid-1980s developed countries had begun to turn away from consensus-led WIPO initiatives to ensure international protection for intellectualproperty rights (see also Sell 1998). Instead, the focus turned to bilateralmeasures designed to ensure protection of technology-based export markets,particularly through the strategy of achieving a linkage between trade andintellectual property (bilateral measures have been highlighted as being ofparticular significance in identifying the origins of the TRIPs Agreement byMerges 1990: 241 and Sell 1998: 132).

The emergence of a business strategy for globalintellectual property protection

In the light of the failure to revise the WIPO-administered conventions andthe scepticism voiced within the GATT Council as to the validity ofassessments of the costs of trademark infringement on international trade,business interests in developed countries became disillusioned with WIPO


‘impotence’ (Blakeney 1995: 76) and more sophisticated in their relationswith the national governments of developed countries. Efforts to strengthenexisting intellectual property conventions were seen by business andgovernment as having ended in failure. The WIPO-administered conventionswere perceived as ‘toothless’ (Blakeney 1995: 76; 1996b: v; 1996b: 544; deKoning 1997: 59), with the failure to achieve significant amendment of theParis Convention attributed to too much influence on the part of developingcountries (Merges 1990: 239). Meanwhile, the growth of pirated andcounterfeited goods appeared to be continuing unabated.

By the end of the 1970s, business interests had already begun to put thecase for stronger intellectual property protection abroad through mechanismsother than the WIPO conventions. As early as 1978 the Publishers’ Association(PA), representing the copyright interests of book publishers in the UnitedKingdom, had brought, and subsequently won, a civil action in the Singaporecourts against a publisher (Ng Sui Nam) found to have infringed textbookcopyright. The case (unreported) was settled after a preliminary ruling againstthe defendant, based on the applicability of the UK Copyright Act of 1911 toSingapore following independence.15 Subsequently, the PA broadened itsagenda of seeking redress for copyright infringements on an internationalscale by sending a delegation to the United States to press Harvey Bale, thenDeputy US Trade Representative, for the United States to take action againstinfringement worldwide. Although the PA met with some resistance fromUS policy-makers, who did not immediately appreciate the significance of adelegation acting on behalf of UK publishing interests travelling to the UnitedStates to influence public policy, the PA had used a strategy that many highprofile US companies would later replicate by calling for international actionin order to produce a coordinated response to copyright infringement. ThePA had demonstrated that, at least from a UK perspective, the potential wasalready there for a global dimension to a coordinated business strategydesigned to protect intellectual property rights abroad.

As the 1980s progressed, such coordinated corporate activity became morecommonplace. The agricultural chemicals producers, the Anti-counterfeitingCoalition and the newly established Copyright Alliance all began to coordinatelobbying activities to press for changes in US trade policy (Sell 1998: 132).Soon afterwards, US business stepped up its strategy of raising awareness ofintellectual property infringement abroad by submitting reports toCongressional hearings (Blakeney 1996b: 2; Stewart 1993: 2253), highlightinglosses caused by infringement of intellectual property rights.

In 1983 the Sub-committee on Trade of the United States House ofRepresentatives had heard that the annual losses to the video industryresulting from copyright infringement were approximately $6 billion,16 whilein 1984 the House Sub-committee on Oversight and Investigations was toldby the Automotive Parts and Accessories Association (see also Blakeney 1996b:2; Stewart 1993: 2254) that the industry lost some $12 billion fromcounterfeiting of spare parts.17 Meanwhile the agricultural chemical industry


had complained that its foreign markets were being seriously eroded by therise in counterfeiting.18 But estimates of the losses to US business abroadsuffered from a risk that they were unverified figures, produced without useof a standardised set of criteria or methodology and running the risk thatlosses might be exaggerated as a result (see also Weissman 1996: 1085).Despite this, the US government lacked both the resources and the inclinationto question the evidence presented to them by corporate America. Thelanguage used by US business also impressed government officials andpoliticians. The terms in which their case was expressed were emotive,portraying the ‘theft’ being undertaken by developing countries and thosecopying US products as ‘pirates’. By using the language of incursion and theft,US companies effectively changed the policy debate (Weissman 1996: 1088).For the US government, producing a response was seen as necessary andproportional to the concerns articulated by US business interests. Initially,this response came in the form of bilateral trade legislation.

Section 337 of the Tariff and Trade Act 1930

Strong measures to combat infringement of domestic intellectual propertyrights in the United States existed as early as 1974, when Section 337 of theTariff and Trade Act of 1930 was amended by transferring from the Presidentto an independent government agency, the International Trade Commission(ITC), on the application by the domestic right holder, the power of seizureand forfeiture of infringing goods or to prevent the importation of foreigngoods that violated the rights of intellectual property holders in the UnitedStates19 (see also Evans 1994: 149; Sell, 1995: 166; Seltzer 1992: 351). In orderto establish a violation of Section 337, it is necessary to prove the following:an unfair method of competition and unfair act; the importation of goodsinto the United States or their sale by the owner, importer or consignee oragent of either; the existence of a domestic industry or one that is in theprocess of being established; and injury to the domestic industry through theinfringement of a valid patent, copyright or trademark. For the complainantUS company, Section 337 was a particularly powerful action since, in additionto remedies available in the ITC, the plaintiff is also entitled to action in thefederal court (Evans 1994: 149). The effect of Section 337 was to provide amore impartial forum for claims of intellectual property infringement andto speed up the investigations procedure that, owing to earlier delays, hadallowed imports under investigation to continue unchecked for several years.By introducing a twelve-month deadline by which the ITC was obliged tocomplete its investigation, greater advantage fell to the US plaintiff, since itleft the defendant foreign importer with little time to prepare a case. Theamended Section 337 also carried with it the problem that autonomousnational measures designed to deal with goods that infringe intellectualproperty rights only have an impact on goods imported into the US marketand could not prevent counterfeit goods being sold in third-country markets


(Evans 1994: 151). Section 337 therefore offered no conciliation to UScompanies seeking to export their goods to markets where piracy andcounterfeiting were rife. That problem could only be addressed throughmultilateral trade agreements or, in their absence, by using the threat ofbilateral trade legislation in US domestic law.

Section 301 of the Trade Act 1984

Before 1984, the US government had pursued an ad hoc approach tointellectual property problems raised by individual companies. US embassiesabroad assisted on a case-by-case basis (Sell 1998: 133). But the failure ofattempts to reform the WIPO conventions brought the need to adopt abilateral approach to linking trade and intellectual property sharply into focus(Drahos 1995: 9).

In 1984 the US Congress, responding to complaints from business aboutlack of progress in the Tokyo Round of GATT and in negotiations to revisethe WIPO conventions, bowed to pressure for new bilateral trade legislation.The Trade Act of 1984 introduced important amendments to Section 301 ofthe Trade and Tariff Act of 1974. Section 301 of the Trade Act of 1984permitted the President to seek the elimination of ‘unjustifiable andunreasonable’20 trade practices and introduced a trade-based approach tointellectual property protection (Sell 1995: 172), with intellectual propertyprotection grafted onto the existing Section 301 policy structure (Ryan 1998:73). The effect of the amended Section 301 was threefold. First, it gave theOffice of the United States Trade Representative (USTR) the right ofinitiative to investigate the appropriateness of another country’s intellectualproperty without waiting for a complaint from a US company.21 Second, itexplicitly made failure to protect intellectual property rights actionable withtrade sanctions and defined as ‘unjustified and unreasonable’ those practicesthat denied fair and equitable provision of adequate and effective protectionof intellectual property rights, expanding the criteria for finding an act‘unjustifiable’ to include any act, policy or practice that denies protection ofintellectual property rights. Third, it included intellectual property protectionas a new criterion for the elimination of tariff privileges for imports into theUS from designated developing countries under the Generalised System ofPreferences (GSP)22 (see also Blakeney 1996a: 544; 1996b: 4; Mesevage 1991:423; Sell 1995: 172; 1998: 133; Stewart 1993: 2256). Through Section 301 theUnited States placed considerable pressure on developing countries to meetits demands for intellectual property protection (Henderson 1997: 652). Ineffect, ‘trade and intellectual property began to merge in 1984’.23

The amended Section 301 was a mandate for the USTR to defend USintellectual property rights in the global economy. By 1985, responding to acomplaint lodged with the USTR by the Motion Picture Association (accordingto Braithwaite and Drahos 2000: 71), the amended Section 301 was beingused for the first time against the Republic of Korea after complaints by US


companies about the limited scope of Korean intellectual property laws. Thethreat of sanctions succeeded in changing Korea’s intellectual property laws.It became apparent that the mere threat of Section 301 could be sufficient toexert pressure on developing countries to improve intellectual propertyprotection available in national law through bilateral negotiations. Section301 was also used against Brazil after complaints about copyright protectionfor computer programs and software (Blakeney 1996b: 4). In 1987, followinga complaint to the USTR by the Pharmaceutical Manufacturers’ Association(Braithwaite and Drahos 2000: 71), the United States brought a further actionagainst Brazil under Section 301, increasing tariffs on Brazilian exports inretaliation for Brazil’s inadequate patent protection for pharmaceuticalproducts (Blakeney 1996a: 545). In October 1988, acting in response to apetition filed by the Pharmaceutical Manufacturers’ Association (Weissman1996: 1078), the US government for the first time acted on its Section 301threats, imposing 100 per cent tariffs on $39 million worth of Brazilianimports.24

Bilateral negotiations

In addition to Section 301, in 1983 the United States began bilateralnegotiations with Taiwan over patent protection for chemical compoundsand inadequate copyright protection and in 1984 commenced negotiationswith Singapore with regard to the need for improvements in copyrightprotection for recorded music (see Blakeney 1996a: 545; Stewart 1993: 2256–7).In Singapore’s case, the US record industry reported deficiencies in copyrightprotection and identified it as the world’s largest producer of pirated work,leading to an estimated loss of $358 million for US industry, with $220 millionalone lost by the recording industry through the production and sale of piratedmusic cassettes and compact discs originating from Singapore (according toBlakeney 1995: 79). Faced with the adverse trade relations with the UnitedStates, in 1987 the Singapore Government announced its intention tostrengthen national copyright law to adhere to the principles of the UniversalCopyright Convention (UCC) and to apply for membership of WIPO(Blakeney 1996b: 4; Stewart 1993: 2257).

Even before the Uruguay Round had got under way, the dual strategy ofSection 301 and linking intellectual property standards to trade in bilateralnegotiations had come to be viewed as a successful strategy by US businessand government.

Preparations for the Uruguay Round

In 1985 the GATT Council directed the Preparatory Committee of the GATTto identify issues for the forthcoming GATT Round, taking into account the1982 Ministerial Work Programme.25 In the light of consideration of anti-counterfeiting in the 1982 Ministerial Work Programme, the United States


proposed the inclusion of all intellectual property rights in the GATT, notjust trademarked goods, reaffirming its belief that the GATT was theappropriate forum to seek enforcement of intellectual property rights(Stewart 1993: 2263). Within the Preparatory Committee, the Swiss andColumbian ambassadors proposed a compromise between those advocatingthe inclusion of intellectual property rights and a number of developingcountries that were questioning the competence of the GATT to deal withsuch matters. The Group of Ten countries (and Brazil and India in particular)continued to maintain that the GATT lacked the competence to address theintellectual property rights (Blakeney 1996a: 544). But developing countrieswere by no means unanimous in their hostility towards the inclusion ofintellectual property in the GATT Round. Newly industrialised countries inSouth East Asia generally accepted the need to provide more effectiveprotection of intellectual property rights, acknowledged the need to includethese issues in the GATT and saw the benefits of a dispute settlementprocedure to counterbalance bilateral trade measures by the United States(Evans 1994: 160). On 30 July 1986 the Swiss and Columbian ambassadorsproduced a proposal that, although it did not receive unanimous support,represented the views of forty delegations (see also Bradley 1987: 83; Evans1994: 160; Stewart 1993: 2264) and formed the basis of the inclusion ofintellectual property in the list of subjects for negotiation in the MinisterialDeclaration of 1986.26 Separate proposals were tabled by Brazil27 andArgentina28 (Gervais 1998: 10) but, although all three draft texts weresubmitted to the Punta del Este Ministerial Conference, it was the Swiss–Colombian proposal that was adopted without substantial changes (see alsoEvans 1994: 161).

Ministerial Declaration of 1986

The Ministerial Declaration of 20 September 1986, which launched theUruguay Round of trade negotiations, outlined a whole range of issues fornegotiation, including Trade-Related Aspects of Intellectual Property Rights(TRIPs). The objectives of the TRIPs negotiating group were set out as follows:‘In order to reduce the distortion and impediments to international trade,and taking into account the need to promote effective and adequate protectionof intellectual property rights, and to ensure that measures and proceduresto enforce intellectual property rights do not themselves become barriers tolegitimate trade, the negotiations shall aim to clarify GATT provisions andelaborate as appropriate new rules and disciplines’.29 The negotiations aimedto ‘develop a multilateral framework of principles, rules and disciplinesdealing with international trade in counterfeit goods, taking intoaccount work already undertaken in the GATT and without prejudice tocomplementary initiatives which might be taken by the World IntellectualProperty Organisation or elsewhere to deal with these matters’.30


Business support for the TRIPs Agreement

The TRIPs Agreement was made possible by the unprecedented support ofbusiness, which not only promoted the agreement but also contributed to itscontent (Evans 1994: 165). In truth, at the beginning of the GATT UruguayRound of multilateral trade negotiations in 1986 few people in the USTRknew much about intellectual property (a view corroborated by Ryan 1998: 1).Instead, it was intense lobbying activity from industry, particularly in theUnited States (Sell 1998: 137), that laid the foundations of linking intellectualproperty protection to trade in the multilateral context. As James R. Enyart,Director of International Affairs at Monsanto, put it: ‘the rules of internationalcommerce are far too important to leave up to government bureaucrats andtheir academic advisers. But governments, not businessmen, make rules andthey only listen when the chorus gets big enough and the singing loud enough’(Enyart 1990: 53). So it was that patent and copyright business groups drovetrade-related intellectual property policy in the 1980s and 1990s, althoughthe diplomacy was conducted on their behalf by the USTR (Ryan 1998: 8).Pharmaceutical companies and copyright industries were among the mostactive of these groups because these sectors had relatively low entry barriersand consequently high exposure to piracy. High-level executives from activistcompanies representing these two industry groups – Ed Pratt, chief executiveofficer (CEO) of Pfizer and John Opel, CEO of IBM – were members of theUS President’s Advisory Committee on Trade Policy and Negotiations(ACTPN). The ACTPN was designed to provide direct input by the USbusiness sector into US trade policy (Drahos 1995: 8).

The ACTPN had been established under the 1974 Trade Act and wasdesigned to institutionalise business input (Ryan 1998: 68), provide a forumfor creating a trade-related strategy to reform international intellectualproperty institutions (Ryan 1998: 105) and provide a direct route for UScompanies to influence US trade policy (Drahos 1995: 8). With a degree ofaccess to the US government that would have been unprecedented for industryin other countries, the ACTPN provided an open line of communication forUS industry to influence trade policy that was crucial in the evolution of atrade-based strategy for intellectual property (Braithwaite and Drahos 2000:61). From 1981 onwards the ACTPN was chaired by Ed Pratt. With a businessstrategy of marketing its pharmaceutical products in developing countries,Pfizer had particular concerns about reverse engineering and piracy of itspatented medicines (Braithwaite and Drahos 2000: 62). The personality andleadership of Ed Pratt did much to galvanise the attitude of others in the USbusiness community, who became more willing to publicly acknowledge thatinfringement of intellectual property abroad was unacceptable (Drahos 1995:8). Indeed, it is instructive to note that Ed Pratt has himself referred to hisinvolvement in events leading up to the TRIPs Agreement as being his greatestachievement. Meanwhile, the successes achieved in linking trade tointellectual property in US bilateral trade negotiations began to make a largesegment of US high technology and creative industries believe that an


improvement in intellectual property standards was achievable on a globalscale (Enyart 1990: 54).

In 1985 the ACTPN set up a Task Force on Intellectual Property (Drahos1995: 8). US industry was well represented on the Advisory Committee forTrade Negotiations’ Task Force. In addition to Pratt and Opel, Fritz Attaway(Counsel for the Motion Picture Industry Association) and Abraham Cohen(President of the International Division of the pharmaceutical companyMerck) sat on the eight-member committee (see Sell 1995: 175). Therecommendations of the Task Force were fundamental to the developmentof a US strategy for intellectual property (Braithwaite and Drahos 2000: 62).The ACTPN Task Force emphasised the need to educate Congress and theUSTR about the importance of protecting intellectual property rights tofacilitate investment in developing countries, arguing that US industrialcompetitiveness was being hindered by the denial of effective intellectualproperty protection in many developing countries (Ryan 1998: 69). In its reportof October 1985 the Task Force recommended that US policy-makers developa trade-based approach to intellectual property protection (Sell 1995: 175).But, although the strategy of targeting one country at a time through bilateraltrade action was useful as a means of improving intellectual propertyprotection in a single country, it also had the drawback of being inefficient asthere were far too many countries with errant intellectual property laws(Weissman 1996: 1083).

In March 1986 the ACTPN refined its agenda and specifically identifiedthe long-term goal of orienting intellectual property within the GATT (Drahos1995: 9) as a supplement to bilateral action. The idea was to link intellectualproperty protection to trade on as many levels as possible (Braithwaite andDrahos 2000: 62), shifting forums from bilateral to multilateral trade relationswhere this suited the cause of global corporate actors. Later that year the‘GATT strategy’ (Ryan 1998: 105) was endorsed by the USTR as a means toovercome opposition within WIPO to a new code and as a carrot-and-stickapproach to trade and intellectual property negotiations with developingcountries, offering, on the one hand, concessions on agriculture and textiletariffs, and technical training of foreign officials in intellectual property issues,in return for higher levels of intellectual property protection to combat piracyand counterfeiting, while, on the other hand, using Section 301 and GSP asleverage in bilateral negotiations aimed at improving intellectual propertyprotection in developing countries (see also Drahos 1995: 9; Sell 1995: 176).Business had displayed a willingness to engage in forum shifting, from WIPOto GATT, when the potential to strengthen global intellectual propertyprotection proved significant (see also Braithwaite and Drahos 2000: 201).

The IPC and IIPA

The ACTPN was not only crucial to the development of a business strategyfor international intellectual property protection on its own account, it was


also significant because it served to focus attention on the fact that developinga new international code on intellectual property required the support of anucleus of committed US companies with sufficient international businessat stake to be willing to spend time and effort on the issue (Enyart 1990: 54).But although John Opel of IBM and Ed Pratt of Pfizer wanted to raiseintellectual property as a trade issue through the work of the ACTPN, theydid not immediately know how to articulate those concerns. It was here thatthe emergence of single-issue business groups proved so important in thehistory of the TRIPs Agreement.31

By the mid-1980s, US business was engaging in a strategic reorganisationof the way it articulated its complaints about piracy and counterfeiting abroad.In addition to organising themselves through the traditional route of sector-specific interest group representation, a further sphere of influence wassought through the formation of representative groups that represented anumber of industries, bound together by the common goal of seeking tostrengthen intellectual property protection in foreign markets. In effect, thisnew breed of representative group was an amalgamation of previouslydisparate industry groups. The most prominent of these were the IntellectualProperty Committee (IPC), representing patent-reliant industries in generalin the United States and the proprietary pharmaceutical industry in particular,and the International Intellectual Property Alliance (IIPA), representing themain copyright-reliant industries, including those operating in the film, musicand publishing sectors.

The IPC grew out of the ACTPN (Braithwaite and Drahos 2000: 71) inthe sense that it was Pratt and Opel, ACTPN members, who conceived theidea of an IPC with a membership of CEOs and funded directly from theircompanies (see also Enyart 1990: 54; Sell 1998: 137). The IPC comprisedthirteen founding members: Pfizer; IBM; Merck; General Electric; DuPont;Warner Communications; Hewlett-Packard; Bristol-Meyers; FMCCorporation; General Motors; Johnson and Johnson; Monsanto; and RockwellInternational. For the US film and pharmaceutical industries in particular,intellectual property was the backbone of their industries (Braithwaite andDrahos, 2000: 61). The IPC, run by Jacques Gorlin (a former Washingtonpolicy-maker, consulting economist to IBM and later head of the Gorlin Group,which continues to provide the secretariat for the IPC to this day), was(according to Ryan 1998: 9) well managed, well staffed, well funded andeffective, with a single-issue agenda that allowed it to be more focused, moreflexible and more responsive than traditional sector-specific trade associations(Enyart 1990: 54).

Unlike the IPC, the IIPA did not initially advocate a multilateral GATT-based approach to copyright protection, but instead favoured bilateralnegotiations as the most effective means of strengthening enforcement ofcopyright protection in developing countries (Ryan 1998: 70). The IIPA, runby Eric Smith (a lawyer and Washington lobbyist), at that time representedthe interests of eight trade associations: the Association of American


Publishers; the Film Marketing Association; the Association of DataProcessing Service Organisations; the Computer and Business EquipmentManufacturers Association; the International Anti-counterfeiting Coalition;the Motion Picture Association of America; the National Music Publishers’Association; and the Recording Industry Association of America.32 These tradeassociations, in turn, represented over 1,350 individual companies. The IIPAadopted a strategy of educating US policy-makers who, they believed, knew agreat deal about trade in real property goods but little about trade inintellectual property (Ryan 1998: 70).

With the objective of conveying to US policy-makers the scale of losses toUS industry resulting from piracy of copyrighted works, in 1985 the IIPAsubmitted a report entitled ‘Piracy of US Copyrighted Works in Ten SelectedCountries’ to the ITC, complaining about the detrimental effect of copyrightpiracy in Brazil, Egypt, Indonesia, Malaysia, Nigeria, the Philippines, theRepublic of Korea, Singapore, Thailand and Taiwan (IIPA, 1985; see alsoBlakeney 1995: 78; 1996a: 545; Ryan 1998: 71; Sell 1995: 164; Stewart 1993:2254). In its report to the ITC, the IIPA estimated that the industries itrepresented collectively lost nearly $1.5 billion annually as a result ofinadequate copyright protection in the ten countries. Using figures suppliedby the industry associations in the United States, the IIPA estimated thatthe music industry alone lost over $600 million per year and the publishingindustry lost over $400 million per year, whereas the movie industry lost over$130 million per year and the software industry lost over $125 million (Stewart1993: 2254). The IIPA called on the US government to establish aninternational trading environment in which intellectual property wasrespected and protected. By the mid-1980s, business pressure had broughtintellectual property onto the political agenda and raised the profile ofarguments that the government could best assist business by linking thedefence of their intellectual property rights to trade. Given the unsuccessfulattempts to strengthen international conventions on intellectual propertyprotection, the United States initially sought this linkage through domestictrade law and bilateral trade agreements (Stewart 1993: 2255).

But before the GATT strategy could be set in motion, US policy-makersfaced a problem. Although copyright-dependent industries had also raisedthe profile of intellectual property as a trade issue, this time by forming theIIPA to identify quantifiable indicators and present statistical evidence (Ryan1998: 10, 69) to clearly send the message to policy-makers that US copyrightindustries were losing out to piracy abroad, some copyright-based industriesstill adamantly opposed the idea of including copyright protection in theGATT negotiations (Ryan 1998: 106). Since the problem for copyright-basedindustries was not with substantive provisions of national laws, but ratherwith lack of enforcement, the music, film and book publishing industriesexpressed a preference for bilateral trade negotiations and sanctions underSection 301 as the most flexible and effective means of improving enforcementlevels (Ryan 1998: 107). Over a series of meetings with representatives of


copyright-based industries, the USTR policy-makers put the case for amultilateral negotiating strategy at the GATT, arguing the long-term benefitsof a TRIPs Agreement. The advantages of such a move were twofold: first,the inclusion of intellectual property within a multilateral trade agreementwould give protection of those rights wide international coverage; and, second,the enforcement mechanisms of any such multilateral agreement would alsobe available for dealing with infringement of intellectual property rights (seealso Braithwaite and Drahos, 2000: 61). Reluctantly, the copyright-dependentindustries agreed to support a multilateral negotiating strategy (Ryan 1998:107), although, crucially, this was to be along side rather than a replacementfor the proven route of bilateral Section 301 action.

The next task was to get intellectual property on the Uruguay Round GATTnegotiating agenda. Government largely left this task to industry and theirissue-specific groups, particularly the IPC. In September 1985 Jacques Gorlinwrote, in response to a request from the USTR, a review of the major issuesinvolved in placing intellectual property into the next round of the GATT(see also Drahos 1995: 13). Gorlin’s paper set out a possible model for aGATT code on intellectual property and outlined the problems that wouldneed to be overcome if such a code was ever to be adopted (Drahos 1995: 12).

Since US business, represented by Pratt and Opel on the ACTPN, knewthat any multilateral initiative would require the support of other developedcountries (Braithwaite and Drahos 2000: 71), the first task for the IPC wasto form alliances with business groups in Europe, initially through theConfederation of British Industries (CBI) in the UK, the Federation ofGerman Industries (the BDI) in Germany and the Patronat in France.Through these national groups, the IPC then met with the Union of Industrialand Employers’ Confederation of Europe (UNICE), which represented thirty-three national business federations at a European level. The IPC and UNICEthen met with officials of the Japanese Federation of Economic Organisations(Keidanren), which represents virtually all business sectors and has goodrelations with the powerful Japanese Ministry of International Trade andIndustry (MITI), with a view to gathering international business support forpursuing a multilateral agreement on intellectual property protection andtrade.33 Adopting a similar strategy to their US counterparts, UNICE andKeidanren were then able to use their contacts with policy-makers in theEuropean Communities and Japan to exert pressure aimed at building supportfor a multilateral agreement on intellectual property protection. Thistrilateral group of US, European and Japanese business interests was to provecrucial in distilling the fundamental principles of intellectual propertycontained in a practical code, written in the language of business (Enyart1990: 55), that was to be so significant when submitted to the delegates tothe GATT negotiations during the Uruguay Round. Without the support ofEuropean and Japanese business, the proposal for a TRIPs Agreement wouldnever have been included in the Ministerial Declaration at Punta del Este,


which set the agenda for the Uruguay Round (see also Braithwaite and Drahos2000: 87).

Despite claims by some scholars in the United States (see, for instance,Ryan 1998: 107) that European and Japanese trade associations were reluctantto support the initiative and that neither they nor their governments were ascommitted to supporting the initiative as were some groups in the UnitedStates, in reality this was far from the case. European accounts of the actualdiscussions that took place between the IPC, UNICE and Keidanren paint arather different picture. According to business representatives in Europe whorecall the formulation of joint US, European and Japanese proposals, thethree industry groups worked well together, not least because strong businessinterests in Europe were to be found in the pharmaceutical and bookpublishing sectors, whereas in Japan intellectual property protection forconsumer electronics and software was crucial, all groups with a powerfulinterest in improving international intellectual property protection.

The differences that arose between positions of the IPC, UNICE andKeidanren were much more to do with the culture of lobbying and engagingwith government on intellectual property matters. In Japan, the Keidanrenshared the concerns of the IPC in relation to the growing problem ofinfringement of intellectual property rights but had no experience of takingissue with MITI on this type of issue. Similarly, the US model of lobbying forimprovements in intellectual property protection was very different fromthe tradition of influencing public policy in the European Communities.Although in the United States industry tends to have a relatively open anddirect dialogue with government, in the EC there has been a greater tendencyfor business to make its views known via representative groups. The result isthat, once the views of national industry associations have been articulatedby UNICE, there is a likelihood that the case presented to policy-makersmay lack coherence and represent only a consensus view of the various nationalinterests. European Commission attempts to take into account the views of afar greater variety of national, industry and consumer interests in theEuropean Communities face a much tougher task in influencing policy-makersthan do their counterparts dealing with the US administration. But, far frombeing reluctant to engage with their governments in support of aninternational agreement on intellectual property protection during the earlystages of formulating a coherent proposal for the TRIPs Agreement, the factwas that European and Japanese business interests simply behaved differently,though not necessarily with less enthusiasm, than their counterparts in theUS business community.

Such is the under-representation of the role played by European businessin accounts of the origins of the TRIPs Agreement emanating from the UnitedStates that, despite widespread acknowledgement that the initial drafting ofthe joint proposals was undertaken by Jacques Gorlin on behalf of the IPCand representing US business interests, the fact that John Beton, Chairmanof the UNICE Intellectual Property Working Group, later re-wrote up to half


of the original text on behalf of European business interests by the time ajoint IPC, UNICE and Keidanren statement of views was ready for publicationin 198834 has been completely unrecognised.

In June 1988, nearly three years after Jacques Gorlin had drafted the initialpaper on intellectual property at the GATT for IBM, the IPC, UNICE andKeidanren issued a joint statement of views on the ‘Basic Framework of GATTProvisions on Intellectual Property’ as a ‘manifesto’ (Drahos 1995: 14) that,it was hoped, would form the basis of a GATT intellectual property code.The Basic Framework (which later became generally known as the ‘WhiteBook’ proposals) was presented to the GATT Secretariat as representing thecoordinated views of the US, European and Japanese business communities.A consensus among business groups in developed countries had been achievedwith relative ease. The Group of Ten developing countries, namely Argentina,Brazil, Cuba, Egypt, India, Nicaragua, Nigeria, Peru, Tanzania and Yugoslavia,meanwhile denounced the Basic Framework in general and its patentprovisions in particular. India argued that developing countries should befree to exclude pharmaceutical products, food and chemicals from patentprotection, shorten patent life for other sectors and license foreign patentsunder preferential terms (Ryan 1998: 110). India argued that a patentconferred in the host country was an obligation to undertake local working,with the use of compulsory licensing being recognised as a legitimate policytool to prevent foreign companies from abusing their exclusive rights byrelying on imports of patented goods. Despite these protestations, thedemands of industry representatives made in the White Book proposals wereclearly reflected in the final TRIPs Agreement (see Sell 1998: 138). The IPCclaimed to have played a key advisory role, at the USTR’s request, indeveloping the official US proposal on intellectual property that the USgovernment tabled before the TRIPs Working Groups in October 1987(Weissman 1996: 1084).

While the ACTPN (and Ed Pratt, CEO of Pfizer, and John Opel, CEO ofIBM, in particular) were working with Jacques Gorlin and the IPC to producethe legal ideas that underpinned the strategy of linking trade to intellectualproperty in the multilateral setting of GATT, Eric Smith and the IIPAcontinued to develop links between intellectual property and trade in thebilateral context (Braithwaite and Drahos 2000: 304). Despite the complaintsin 1986 from the USTR that other Quad members (the EuropeanCommunities, Japan and Canada but not the United States) were yet to beconvinced about the need to include intellectual property in the UruguayRound (Braithwaite and Drahos 2000: 204), this might have been the casewith governments in the European Communities and Japan but it wascertainly not the case with intellectual property-reliant industries in thosecountries. The pharmaceutical, publishing and drinks industries in Europe,together with the software and computer games sectors in Japan, were allwell advanced and articulate in expressing their views on the need forinclusion of intellectual property protection in the Uruguay Round. The IPC


initiative proved so successful precisely because it duplicated views that werealready prevalent about piracy and counterfeiting among key European andJapanese business sectors. In effect, the most important factor in the IPC’sapproach to European and Japanese business groups was above all the act ofpresenting exactly what global business wanted (in the 1988 FrameworkDocument on Intellectual Property) at the right time to articulate theanxieties of global business interests.

Special 301 of the Omnibus Trade and Tariff Act 1988

In the United States, the perceived success of Section 301 and bilateralnegotiations led to increased pressure through industry lobbying (Sell 1998:134) and from the IIPA in particular (according to Blakeney 1996a: 544; Ryan1998: 71) for further unilateral action to safeguard US economic interests.This pressure continued well after the Uruguay Round had commenced. Theresulting Omnibus Trade and Tariff Act of 198835 introduced Special 301,which enhanced the role of the USTR’s office, transferring to it substantialpowers previously held by the President and requiring the USTR to make anannual review of intellectual property practices of foreign trading partners(for further discussion of Special 301’s strategic significance see Anon. 1996:9; Ryan 1998: 73). Transferring powers to the USTR was intended to reducethe possibility of trade policy priorities being waived in favour of foreign policyor defence considerations (Sell 1998: 134). The 1988 Act, which is still inforce, also raised the profile of intellectual property protection under Special301, requiring the USTR to determine whether the acts, policies and practicesof foreign countries deny adequate and effective protection of intellectualproperty rights or fair and equitable market access for US persons that relyon intellectual property protection.36 The USTR is required to report toCongress, identifying foreign countries that have the most onerous acts,policies and practices that have the greatest adverse impact, either actual orpotential, on the relevant US products, and are not engaged in good faithnegotiations or making significant progress in negotiations to address theseproblems.

Within thirty days of releasing the National Trade Estimates Report37 toCongress at the end of April each year, the USTR is required to identifythose foreign countries that deny adequate and effective protection ofintellectual property rights, or deny fair and equitable market access38 to USpersons who rely upon intellectual property protection.39 The USTR mustdecide whether to place those countries identified as ‘priority foreigncountries’ on a ‘priority watch list’ or a ‘watch list’. Priority foreign countriesare those whose practices are most onerous or egregious40 and have thegreatest adverse impact (actual or potential) on the relevant US products41

and who are not making significant progress in bilateral or multilateralintellectual property negotiations42 (see also Evans 1994: 152). Under Special301, if a country is identified as a priority foreign country the USTR must,


within thirty days of identification, initiate a Special 301 investigation of thepolicies and practices that were the basis of the identification. Investigationsare conducted on a fast-track investigation whereby the USTR generally onlyhas six months to complete the investigation and seek to negotiate a bilateralagreement.43 If the foreign country’s practices continue, trade sanctions maythen be imposed under Special 301 in the form of increased tariff duties orimport restrictions44 (Blakeney 1996b: 5; Evans 1994: 152). A country isnotified that it has entered the Special 301 process and that it can expectregular contact from the USTR (Drahos 1995: 10; Sell 1995: 178).

The threat of Special 301 provides the United States with strong leveragewith regard to countries that do not demonstrate appropriate intellectualproperty protection (Evans 1994: 152; Stewart 1993: 2257; Welch 1992: 51).It also indicates that the United States would continue to pursue a ‘carrotand stick’ approach to trade policy (Mesevage 1991: 421; Sell 1998: 135).The continued significance of Special 301 in US trade policy was underlinedon 1 May 1998, when the then US Trade Representative, Charlene Barshefsky,announcing the results of the 1998 Special 301 Annual Review, commentedthat, ‘The progress we have achieved as a direct result of this year’s Special301 annual review underscores the fact that Special 301 is one of the mosteffective instruments in our trade policy arsenal’.45

In practice, the USTR has a small staff and lacks the resources to conductsurveillance of the application of intellectual property laws in developingcountries itself. It is also relatively weak within the US federal governmentadministration. The State Department and the Department of Defense areoften able to overrule the USTR when wider issues of foreign policy anddefence are seen to have priority over intellectual property protection. Thisrelative weakness of the USTR is clear in relation to Argentina, where failureto adequately protect the intellectual property rights of US businesses wentunpunished for several years in the 1990s because Argentina also happenedto be a strategically important ally of the United States in South America.46

Instead, the Special 301 procedure is largely reliant on surveillance offoreign countries by US businesses (Drahos 1995: 10) operating in foreignmarkets and reporting back to the USTR, who then take appropriate actionunder Special 301 on the basis of reports made by US companies operatingabroad (see also Ryan 1998: 80). This business–government partnership isformalised each February when the USTR calls for public comment on itsSpecial 301 announcements in the form of a Request for Written Submissions,published in the Federal Register. Among those submitting Special 301recommendations each year are the IIPA,47 the Pharmaceutical Research andManufacturers of America (PhRMA)48 and the Software PublishersAssociation. These submissions from industry are the only available estimateof trade losses due to intellectual property infringement that are available tothe USTR. What is most striking about Special 301 is the role played bybusiness. In this respect, Susan Sell makes the crucial observation that:


[w]hether industry representatives sit across the table suggesting specificrevisions of foreign countries’ draft legislation, avail themselves of theSection 301 machinery, play the Generalized System of Preferences (GSP)trump card, compile reports of the latest violations and estimates of lostrevenue, conduct raids on pirated goods abroad, or monitor compliancein a vigilant effort to keep the pressure on, they have become importantplayers in the crusade for the world-wide protection of their valuableintellectual property.

(Sell 1995: 164)

In many respects, the result is that the US approach to intellectual propertyhas heavily reflected the sentiments of US business whose interests constituteinvaluable assets (see also Sell 1998: 135).

Assessment

As this chapter has already indicated, it is widely recognised that the TRIPsAgreement was largely the result of pressure from US business (see, forexample, Braithwaite and Drahos 2000: 63; Drahos 1995: 7; 1998: 245). Thereceived wisdom in accounts of events leading up to the TRIPs Agreement isthat in the early 1980s it was US business that led complaints that its interestswere being threatened through piracy and counterfeiting abroad (see, forinstance, Ryan 1998: 107; Stewart 1993: 2253). But although accounts of theemergence of a business strategy for intellectual property protection throughthe GATT have tended to emphasise the role of business interests in theUnited States, there is a danger that an exaggerated view of the UnitedStates’ position in the world (see, for example, de Koning 1997: 66) obscuresthe nature of global business. The complexity of global business interestsmeans that the story of the TRIPs Agreement is perhaps not as straight-forward as focusing on developments in the US might have us believe. Inpractice the interests and concerns of multinational companies, which bytheir nature transcend national boundaries, also ensured that global businesshad a vested interest in achieving a TRIPs Agreement regardless of thecountry in which their head office was located. Although it is certainly truethat the United States was in a unique position as regards the leverage thatit was able to exert through bilateral trade legislation in the 1980s, and thatin some instances multinational corporations take on a US identity (as claimedby Drahos 1995: 16), to focus exclusively on US-based multinationals is simplyto identify a proportion of the relevant business interests with a global reach.

The reality of developments is more complex. Given that, the Publishers’Association, representing the worldwide interests of UK book publishers,had first raised copyright infringement as an issue in international tradewith the USTR as long ago as 1978, there may even be grounds for claimingthat some of the early stimulus for international corporate action against


piracy actually came from the United Kingdom. Coincidentally or otherwise,the case brought by the PA in 1978 marked the beginning of a coordinatedattempt to combat copyright infringement on a worldwide scale, evenadvocating a trade-based approach to copyright protection to the USTR someyears before Jacques Gorlin led an equivalent US delegation to Europe onbehalf of the IPC.

So, although the European Communities have been portrayed as beinglukewarm on initial proposals for a TRIPs Agreement (see, for instance,Drahos 1995: 12; Ryan 1998: 13), in actual fact the European Commission,alerted by the concerns of European business, had been aware of the need toimprove international intellectual property protection since the late 1970s.As Clayton Yeutter (United States Trade Representative between 1985 and1988) acknowledges, ‘[i]t was the United States and Europe, more than anyother GATT members, which understood that strong and effective protectionof intellectual property rights was vital to continued trade expansion … Butfor the unremitting pressure and relentless perseverance by the US andEuropean negotiators, TRIPs would not have succeeded’ (Yeutter, forewordto Gorlin 1999: i, emphasis added).

By the time Uruguay Round negotiations had begun in earnest, corporatenetworking on a global scale had been achieved through the formation of keyrelationships between individuals, companies and business groups in theUnited States, Europe and Japan. Global corporate actors were treating theworld as one market requiring global standards of intellectual propertyprotection. The mobilisation of business interests had proved so successfulin identifying a coherent set of proposals for international intellectualproperty protection that the forthcoming Uruguay Round of GATTnegotiations was awaited with some optimism and a great deal ofdetermination to see the adoption of an intellectual property agreementsupportive of the business agenda. Above all, global corporate actors hadplayed a key role in ensuring that the protection of international rights wouldbe an issue taken seriously during the Uruguay Round.

2 Negotiating the TRIPsAgreement

The Negotiating Plan1 for the GATT Uruguay Round, which included theTRIPs Agreement work programme, was agreed on 28 January 1987. Itcomprised a brief to examine the relevant GATT provisions on the basis ofsuggestions from GATT Members and factual information presented to theGATT Secretariat. Under the heading ‘Trade-Related Aspects of IntellectualProperty Rights, Including Trade in Counterfeit Goods’, the Negotiating Planset the scene for discussions on intellectual property rights within one of thefourteen negotiating groups established under the ‘Group of Negotiation onGoods’. The ‘Negotiating Group on Trade-Related Aspects of IntellectualProperty, Including Trade in Counterfeit Goods’, chaired by Ambassador LarsAnell of Sweden, went on to meet on five occasions in 1987 (according toStewart 1993: 2266) and a total of twenty-eight times before the UruguayRound had reached its conclusion (according to Gervais 1998: 12).2

This chapter traces the progress of the Uruguay Round negotiations onintellectual property protection from the announcement of the negotiatingplan in 1987 up to the adoption of the final text of the TRIPs Agreement in1994. Given the intergovernmental nature of the Uruguay Round, the formalproceedings of these negotiations were, on the face of it, dominated bygovernment representatives, with national delegations acting on behalf ofGATT Members. A detailed examination of the negotiating positions adoptedby national delegations to the Uruguay Round is thus a necessary startingpoint for this chapter.3 However, an accurate account of what happened duringthose negotiations cannot stop there. The official Uruguay Round negotiatorswere greatly concerned with reflecting the interests of multinational businessand negotiations were conducted against the background of bilateral tradelegislation introduced by the United States. With representatives of globalcorporate actors close to official negotiators throughout the Uruguay Roundand particularly active once the detail of the Agreement came to be discussed,the role of business representatives behind the scenes during the negotiationswas crucial both in terms of providing the stimulus for making the linkbetween intellectual property and trade in the GATT and bilateral context,and, at a practical level, in terms of providing the knowledge and draftingexpertise that was often lacking among national delegations.

30 Negotiating the TRIPs Agreement

First phase of negotiations

In response to the GATT Negotiating Plan, the US delegation in Genevasubmitted its own proposal for the protection of intellectual property rightson 19 October 1987.4 The US proposal called for an end to the trade ininfringing products through the implementation of customs controls andimplementation of legislative norms for the protection of intellectual propertyrights (Blakeney 1996b: 3), with an assurance that such measures would notcreate barriers to legitimate trade (Stewart 1993: 2266). The United Statesasserted that inadequate intellectual property protection leads to tradedistortions and the impairment of concessions due to intellectual propertypiracy that amounts to a non-tariff barrier to trade (Doane 1994: 466–7),and insisted that the negotiations ought comprehensively to include patents,trade secrets, industrial designs, integrated circuit designs, copyright andtrademarks, with appropriate national laws based on internationalconventions (see also Ryan 1998: 109; Stewart 1993: 2266).

The European Communities, Japan and Switzerland also tabled proposalsin late 1987 (Blakeney 1995: 78). The EC proposal5 suggested that the TRIPsAgreement should adhere to the basic GATT principles of national treatment,non-discrimination, reciprocity and transparency, as well as covering newcategories of intellectual property rights, such as semi-conductor layouts andplant varieties (Blakeney 1996b: 3). Under pressure from wine and spiritproducers in Europe, the European Communities submitted a later proposalthat geographic indications and appellations of origin should also be includedin a TRIPs Agreement.6 The initial European proposal lacked any statementconcerning substantive standards. It did, however, suggest nationalenforcement provisions (Doane 1994: 474). The Japanese proposal7 wassimilar to the submission of the United States (Stewart 1993: 2267) but, inresponse to the concerns of its domestic computer chip industry, it additionallyaddressed the difficulties in protecting semi-conductor layout designs (Doane1994: 475). Switzerland issued a separate set of proposals, suggesting aframework for a TRIPs Agreement and addressed the need for improvementof the enforcement of intellectual property protection (Stewart 1993: 2267).

During the first three years of the Uruguay Round, the TRIPs negotiationscontinued to be stalled by a disagreement between the developed anddeveloping countries over the competence of the GATT to negotiatesubstantive standards of intellectual property protection (Gorlin 1999: 2).

The Mid-Term Review of the Uruguay Round was held in Montreal from 5to 8 December 1988. It served only to highlight the polarised positions ofdeveloped and developing countries in relation to a TRIPs Agreement.Together with agricultural reform, the TRIPs Agreement had become themain stumbling block for the negotiating teams.8 Although differencesbetween the parties had narrowed by late 1988, with negotiators close to anagreement on the framework for a TRIPs package at the Montreal Mid-Term,developing countries, led by India and Brazil, still blocked progress, continuingto insist that WIPO provided the appropriate forum for intellectual propertyprotection (Stewart 1993: 2269).

Negotiating the TRIPs Agreement 31

Overcoming developing country opposition

The main reason that early attempts to undertake negotiations during theUruguay Round failed to achieve progress was that developing countries, ledby India and Brazil, still questioned the relevance of intellectual property forthe GATT, stressing the role of WIPO as the appropriate forum for intellectualproperty rights (see also Blakeney 1995: 79; Evans 1994: 139). They alsoexpressed concerns about over-protection of intellectual property rightsimpeding transfer of technology and increased costs of pharmaceutical andagrochemical products as the result of patent protection (Gervais 1998: 13).The contention was that a TRIPs Agreement would mean the surrender ofsovereignty over national development objectives and the denial of access totechnology (according to Evans 1994: 166). In developed countries, however,civil society groups and generic manufacturers with an interest in preventingover-protection of pharmaceutical and agrochemical products had relativelylittle input into the design and application of the TRIPs Agreement (see alsoFoster 1998: 302–5), the dominant opinion expressed being the proprietarymanufacturers view that patent protection stimulates higher levels ofinvestment in research and development.

In the face of developing country opposition, the most important stimulusfor progress in negotiations came not through multilateral discussions in theUruguay Round, but through the threat of bilateral trade sanctions beingbrought by the United States under Special 301 of the Omnibus Trade andTariff Act of 1988.9 In April 1991 the USTR made its first use of Special 301by placing India, China and Thailand on the priority watch list because ofinadequate patent protection for pharmaceutical products and the widespreadpirating of US copyrighted books, records, tapes and videos (for a moredetailed account see Blakeney 1996a: 545; Stewart 1993: 2258–9). In addition,China was placed on the priority watch list, having been considered to haveinadequate copyright and trademark legislation (for a detailed discussion onUS bilateral negotiations with China on intellectual property protection seeRyan 1998: 80–5). Although Thailand and China agreed to reform theirintellectual property legislation and were moved from the priority watch listto the watch list in December 1991 and January 1992 respectively (Stewart1993: 2258), in February 1992 the stakes were raised by the revocation ofGSP tariff exceptions for India’s inadequate protection of patents and theplacing of an additional twenty-five countries on the priority watch list.

When, in 1992, the United States carried out its Special 301 threat andsuspended GSP tariff exemptions previously granted to Indian pharmaceuticalproducts (Blakeney 1996b: 6), estimates put the cost to Indian exports to bein the region of $60 million (Henderson 1997: 652). In the face of potentiallosses of this magnitude India, a chief opponent of the TRIPs Agreement,saw its resolve weakened. For the United States, mindful of the tradedisadvantages that its businesses were experiencing in developing countries,to retaliate with measures that would result in equivalent disadvantages fornations not prepared to introduce adequate intellectual property laws was


seen as a legitimate activity. For India and other developing countries, asuccessful conclusion of the Uruguay Round soon became a pragmatic issueof retaining good trading relations with the United States. In the same yeara further twenty-five countries were placed on the priority watch list, withthe combined effect of concentrating the minds of the world on the need toachieve progress in negotiations for a TRIPs Agreement (see also Blakeney1995: 79; 1996a: 545).

Initially at least, the use of Special 301 not only raised the internationallevel of awareness of the need for protection of intellectual property, but alsoprovided a negative impact on legislative change (see also Evans 1994: 156).In particular, India and Brazil hardened their position on reform of domesticintellectual property law rather than be coerced by trade sanctions imposedby the United States. Furthermore, the Group of Ten developing countriesargued that the Uruguay Round discussions should be limited to an anti-counterfeiting code for fashion goods and trademark infringement (accordingto Evans 1994: 166). The Group of Ten rejected the link between trade andintellectual property, arguing that WIPO would be undermined by a newGATT Agreement on intellectual property. The Group of Ten did not waiverin their opposition until the USTR took the unprecedented step of initiatingSpecial 301 action against the Republic of Korea and Brazil. By threateningbilateral trade sanctions against recalcitrant countries one by one, the UnitedStates could effectively be seen to have weakened opposition to a TRIPsAgreement (Blakeney 1995: 79) while ensuring that negotiations could atleast take place within the Uruguay Round and increasing the prospects ofan acceptable TRIPs Agreement (Doane 1994: 492).

As Blakeney has acknowledged (1995: 79; 1996a: 545; 1996b: 5), the factthat Special 301 was definitively introduced as an additional weapon in thearmoury of the United States in negotiating for the TRIPs Agreement wasmade explicitly clear in the 1988 House of Representatives Conference Reporton legislation in Congress, which raised the possibility of using Special 301as a supplement to the US negotiating strategy on TRIPs:

[T]he purpose of the provisions dealing with market access is to assist inachieving fair and equitable market opportunities for US persons thatrely on intellectual property rights protection. As a complement to USobjectives on intellectual property rights protection in the Uruguay Roundof trade negotiations, the conferees intend that the President shouldensure, wherever possible, that US intellectual property rights arerespected and market access provided in international trade with all ourtrading partners.10

The effect of widespread use of Special 301 and, in particular, the carryingout of the threat to impose trade sanctions on India, encouraged thedeveloping countries to seek agreement in the Uruguay Round on the contentof a TRIPs Agreement (a view corroborated by Blakeney 1996a; McGrath


1996: 399). Access to US markets was used as leverage to force developingcountries to implement appropriate national legislation protectingintellectual property rights. This meant that countries that were pressurisedinto implementing such changes were no longer likely to support otherdeveloping nations that were continuing to resist the proposals for a TRIPsAgreement. Once the United States had bilaterally persuaded a sufficientnumber of countries to act on intellectual property rights, it could expectlittle resistance in the multilateral GATT forum that led to the adoption ofthe TRIPs Agreement (see also Drahos 1995: 11). The Special 301 strategyof the United States proved successful precisely because it prevented theorganisation of effective developing country opposition to the TRIPs proposals.US bilateral intellectual property diplomacy was conducted with multilateraltrade negotiation objectives in mind (see also Ryan 1998: 86). From thedeveloping countries’ perspective, sacrificing the principles of commonheritage, free flow of information and national sovereignty (see also Drahos1998: 245) was to be offset within the TRIPs Agreement by the link it forgedwith the Dispute Settlement Understanding, which offered some respite fromthe threat of US trade sanctions under Special 301 as the United States keptup an aggressive bilateral trade diplomacy throughout the eight years of theUruguay Round to keep the issue of intellectual property protection at theforefront of trade negotiations (Ryan 1998: 13).

This strategy proved so successful that, by the final stages of the UruguayRound negotiations, the majority of developing countries were no longeropposing the TRIPs Agreement (see also Drahos 1995: 11). The content ofthe final text of the Agreement then became much more an issue of discussionof detail between the triumvirate of the United States, Europe and Japan.These developed countries converged towards a consensus that the TRIPsAgreement ought to incorporate the Paris and Berne conventions, apply Bernerules to computer programs by defining them as literary works and go beyondthe two conventions to establish minimum standards (see also Ryan 1998:109).

The strategy has been interpreted as being something of a ‘tough guy’approach on behalf of the United States, using the dependency of developingcountries on US market access that had been built up through GSP as leverageagainst developing country opposition to TRIPs (Drahos 1995: 9; de Koning1997: 68). By allowing beneficiary countries tariff-free trading access to theUS market, the effect of Special 301 was to subsequently make that favourabletreatment conditional upon the adoption of domestic legislation protectingintellectual property rights in such a way as was acceptable to the USadministration. The notion that the US negotiating strategy for a TRIPsAgreement involved something of a carrot-and-stick approach is certainly acompelling one, and it does appear that the US adopted a deliberate strategyof reshaping its own trade law to give it an array of negotiating instrumentsduring the Uruguay Round.


1989 Geneva Ministerial Meeting

The Ministerial Meeting held in Geneva from 5 to 8 April 1989 achieved animportant breakthrough via a meeting of the Trade Negotiations Committee.Agreement was reached on a framework for TRIPs that paved the way forsubstantive negotiations (see also Blakeney 1996b: 6; Evans 1994: 169; Gorlin1999: 2) and clarified the negotiating mandate. At this meeting, consensuswas achieved on a framework agreement on the future of negotiations onintellectual property rights11 by recognising the need for action on minimumstandards of intellectual property rights and enforcement, but leaving asidethe contentious issue of whether GATT or WIPO should be the appropriateforum for discussion (according to Doane 1994: 472; Ryan 1998: 111). Theframework agreement included acceptance of the applicability of the basicprinciples of the GATT and of the relevant intellectual property agreementsand conventions; the provision of adequate standards and principlesconcerning the availability, scope and use of trade-related intellectual propertyrights; the provision of effective means for the enforcement of trade-relatedintellectual property rights; and the provision of effective and appropriateprocedures for the prevention and settlement of disputes betweengovernments, including the applicability of GATT procedures (Blakeney1996b: 6).

Emergence of a compromise text

The TRIPs negotiating group met twice in July 1989 to discuss, first, theapplicability of basic GATT principles to intellectual property and, second,the provision of adequate standards regarding the availability, scope and useof intellectual property rights12 (see also Gervais 1998: 14; Stewart 1993:2270). During the remainder of 1989, the TRIPs negotiating group receivedsubmissions from a number of national delegations.13 These proposals fellwithin two broad negotiating positions. First, Switzerland, Sweden, Norway,Finland and Australia called for a GATT agreement to take account of existingWIPO-administered conventions on intellectual property, particularly theParis and Berne conventions, known as the ‘Paris-plus’ and ‘Berne-plus’approach (Gervais 1998: 15). Second, developing countries called for lessonerous obligations and greater discretion for national governments in theapplication of intellectual property law. India, in particular, emphasised theneed for more favourable treatment for developing countries (Stewart 1993:2271). But on 12 September 1989 there was a significant development whenIndia, under bilateral pressure from the United States via Special 301 andencouraged by WIPO’s acknowledgement of GATT competence in relationto international standards of intellectual property protection,14 announcedfor the first time that it accepted in principle the international enforcementof intellectual property rights within the GATT (Evans 1994: 168–70). Bythe end of 1989 there had been numerous proposals by countries participatingin negotiations, but few concrete results (Stewart 1993: 2272).


In early 1990, five further negotiating texts were put forward by the majorplayers in the TRIPs negotiations, namely the European Communities, Japan,Switzerland, the United States and a group of developing countries15

(Blakeney 1996b: 6). The European Communities were the first of theheavyweight negotiating teams from developed countries to show their handin the form of a written proposal16 that has been considered ‘the spark whichignited the work towards the TRIPs Agreement’ (Gervais 1998: 15). Ratherthan simply presenting a set of viewpoints and observations, the EuropeanCommunities undertook the important step of issuing its proposal in theform of a ‘Draft Agreement on Trade-Related Aspects of Intellectual Property’,setting out in treaty articles basic principles, intellectual property rights andenforcement procedures. Just over a month later, on 11 May 1990, the mainelements of the EC proposal were set out again in a separate text tabled bythe United States.17 With strong similarities between the EC and US texts,including almost identical structuring of material and the use of identicalphrases, it has been suggested that they were the result of a coordinatedeffort, with transatlantic consultations between the European Commissionon the one hand and the USTR and US Patent and Trademark Office on theother preceding the tabling of both documents (Dreier 1996: 257; Gervais1998: 15). The consensus already achieved among global corporate actorswas beginning to feed through to policy-makers participating in the UruguayRound negotiations.

But there remained significant differences between the US and EC texts.Whereas the US did not envisage any exceptions to the subject matter thatmay be patentable, the EC proved more sympathetic to a key demand ofdeveloping countries calling for the exclusion of patents for inventions thatwould be contrary to public policy and health, plant or animal varieties orthe biological processes for their production (Stewart 1993: 2273). The UnitedStates and European Communities also differed on the question of theprotection for geographical indications and appellations of origin – a keyconcern of the French wine industry, which brought France into conflict withUS wine makers, who argued that their producers were in many cases thedescendants of French émigrés and entitled to use names of French origin.Nevertheless, the common structure of the EC–US proposal was to provesufficiently enduring to remain at the forefront of subsequent TRIPsnegotiations and form the basis of the eventual Agreement.

The EC and US proposals were followed by a submission from a group offourteen18 developing countries,19 which contained a mixture of generalstatements on the nature of intellectual property protection and specificsuggestions for provisions of any subsequent agreement, including thefundamental issue of exceptions to patentability that had already been raisedby the EC delegation. Switzerland,20 Japan21 and Australia22 also tabled theirown proposals. These were the final national submissions to the TRIPsdrafting process, adding to the vast amount of paperwork presented forconsideration by the TRIPs negotiating group. But despite the submission of


these five texts, negotiations were largely ‘stalled’ (Stewart 1993: 2274). Bythe end of 1990, the TRIPs negotiating group had received a total of forty-nine proposals representing the views of 105 countries on intellectual propertyprotection (Evans 1994: 170).

The Chairman’s Draft

Meanwhile, an attempt to achieve progress by consolidating the variousviewpoints of national delegations was being made elsewhere. On 26 January1990 a ‘Checklist of Issues’ had been produced to codify over 500 points ofdisagreement (see Ryan 1998: 110) by Lars Anell, ambassador to the GATTfrom Sweden and chairman of the TRIPs negotiating group, described bythose close to the negotiations as being the ‘hero of the hour’.23 From the listof checklist issues, Ambassador Anell and the GATT Secretariat consolidatedthe proposals of the European Communities, Japan, the United States anddeveloping countries and brokered a draft compromise text (according toRyan 1998: 111). On 12 July 1990 a meeting of the TRIPs negotiating groupreceived the compromise text that had been drafted by Ambassador Anell onhis own initiative, without the language of the text being agreed by nationaldelegations whose views were expressed in the text. This bold move to breakthe deadlock with a compromise text was made on 18 July 1990 with theChairman’s report to the Group of Negotiation on Goods, commonly knownas the ‘Chairman’s Draft’.24 This report identified the main proposals, settingout countries that had made specific proposals and outlining differences onsubstantive points (Gervais 1998: 17). It presented the positions of the TRIPsnegotiating group, indicating agreed positions with unbracketed language.Bracketed language was used for issues where agreement eluded thenegotiators and categorising the views of developed countries in ‘version A’of the report, with the position of developing countries set out in a separate‘version B’ (Stewart 1993: 2274). The Chairman’s Draft was the only versionof the TRIPs Agreement to attribute positions to specific national delegations.In an attempt to give the impression of closing the gap between the differentnegotiating positions of the parties, all subsequent drafts were coordinatedby the chairman of the TRIPs negotiating committee and the GATTSecretariat (according to Gorlin 1999: 5).

Chairman Anell’s strategy of producing 90 per cent of the text in draft,leaving remaining issues to detailed discussions, proved a success and theChairman’s Draft Compromise Text was a negotiating masterstroke, cuttingthrough differences between the negotiating positions of the variousdelegations by focusing on areas of common agreement rather than ondifferences. It also coincided with a change in attitude in developing countriesto modernise and liberalise their economies where economic arguments weregetting through and intellectual property was increasingly seen as a meansof improving international competitiveness by attracting capital andincreasing transfers of technology (see also Evans 1994: 140). But misgivings


remained among the negotiating teams and national delegations reservedtheir own positions in relation to the detail of patent and copyright law. Therewas also criticism that the Chairman’s Draft showed a distinct bias towardsthe US and EC positions (according to Gervais 1998: 19).

However, differences between developed country positions were becomingmore apparent, particularly over first-to-file versus first-to-invent policiesfor patents (see Wegner 1996: 543 for a discussion of these differences),neighbouring rights of performers, moral rights under copyright, rental rightsunder copyright and geographical indications (see Evans 1994: 172; Ryan1998: 111). In addition, there remained significant disagreement over well-established areas of difference between developed and developing countriesin relation to the term of patent protection, use of compulsory licences andpatentability of plant and animal varieties. Many of the developing countriesremained opposed to the idea of a TRIPs Agreement in principle (accordingto Gervais 1998: 18). There were also fundamental issues of whether theprotection of intellectual property rights should be incorporated into theGATT at all, and whether GATT dispute resolution procedures should beapplicable to intellectual property disputes (Blakeney 1996b: 6).

On 1 October 1990 a revised version of the Chairman’s Draft was submittedto the TRIPs negotiating group, with further revisions incorporated intoanother version of the Draft issued on 22 November 1990. But amendmentsto the July Chairman’s Draft had been minor. In any event, it was this versionof the draft TRIPs Agreement that was presented to the Brussels MinisterialMeeting at Heysel on 3 December 1990 and became known as the ‘BrusselsDraft’.25 By the time the Brussels Draft had emerged, it demonstrated thatsignificant progress had been made by the TRIPs negotiating group (Stewart1993: 2275). Although many issues were still ‘square bracketed’ (Gervais 1998:21) to indicate that agreement still had to be reached on specific points, theBrussels Draft of the proposed TRIPs Agreement contained most of theprovisions in a form close to their final versions. The remaining issues to beresolved were the question of transitional arrangements for developingcountries to implement the TRIPs Agreement (see also Gorlin 1999: 5); theprotection of pharmaceutical products by patents; the role of disputesettlement procedures; protection of geographical indications; the status ofmoral rights relating to copyright; protection of computer programs,databases and sound recordings; and the neighbouring rights of performersand broadcasters (see also Gervais 1998: 21).

The Brussels Draft

In the event, when the Brussels Ministerial Meeting collapsed in acrimonyover unresolved issues in agriculture negotiations, the protection ofintellectual property rights was left until the Uruguay Round could berestarted the following year. Nevertheless, in retrospect, the BrusselsMinisterial Meeting proved to be a watershed between the open negotiations


of 1990 and the more focused discussions to follow. Although the BrusselsDraft was to remain the basis for further negotiations, at the end of 1990with the draft TRIPs Agreement in good shape,26 the pace and style ofdiscussions changed, with Ambassador Anell convening regular informalsessions for key players, without the intrusion of formal reports on theproceedings being prepared by the GATT Secretariat (Gervais 1998: 19). Ineffect, the TRIPs negotiations had ‘gone underground’ (Gorlin 1999: 5).

Throughout 1991, various attempts were made to find ways to resolve theoutstanding issues in relation to intellectual property rights. Thesenegotiations took place against the backdrop of a procedural innovation thatwas to prove crucial to the successful conclusion of the TRIPs Agreement.Until the end of 1990 TRIPs negotiations had been undertaken in theconventional ‘Green Room’ pattern of GATT negotiations (Gorlin 1999: 4).In the Green Room negotiators from all countries involved in the GATTUruguay Round engaged in discussions with one another across the table of,traditionally, the Green Room of the GATT building in Geneva, with drafttexts exchanged and differences narrowed through the successive versions.In February 1991, given the drawbacks associated with achieving agreementamong the large number of countries involved in the negotiations, the ‘GreenRoom’ process was abandoned in favour of a process whereby the Chairmanof the TRIPs Working Group himself put forward the draft texts fornegotiators to consider. Significantly, although the content of the draftsreflected participating countries’ priorities, the language of these texts wasno longer that expressed by the negotiators, but chosen by Ambassador Anelland the GATT Secretariat (Gorlin 1999: 4). The abandonment of the ‘GreenRoom’ process in effect took much of the heat out of highly politicisedarguments about the draft TRIPs Agreement.

A second procedural innovation was initiated in the closing days of 1991.The ‘10 plus 10’ Group27 was set up to bring together negotiators from thedeveloped and developing countries that were most active and most skilledin intellectual property protection (see also Evans 1994: 173; Gorlin 1999:4). Formal meetings were still held each month to allow countries notparticipating in the informal discussions to express their views (Gervais 1998:20), although after the Brussels Ministerial Meeting negotiators took a ‘break’the formal TRIPs negotiating group did not convene again until 27–8 June1991 (Gervais 1998: 22). Although little progress was made in the formalTRIPs negotiating group from this time on, the meetings did enable themomentum of TRIPs negotiations involving all national delegations to bemaintained. In addition, with unresolved issues increasingly those of detailbetween the United States, the European Communities and Japan, bilateralnegotiations took on an increasing significance as the Chairman and GATTSecretariat sought to reduce the number of options on the negotiating table(see also Gervais 1998: 19; Stewart 1993: 2280). The Quad countries (theUnited States, the European Communities, Japan and Canada) met as agroup, deciding on the direction of the negotiations and seeking to resolve


differences between their positions before presenting a common viewpointto the other negotiators (Gorlin 1999: 4).

With the sharper focus to negotiations in such a limited forum, thepersonalities of the principal negotiators became increasingly important,particularly in terms of relations between Ambassador Yerxa and MichaelKirk of the US delegation, Peter Carl of the European Commission and AdrianOtten of the GATT Secretariat. As negotiations moved towards discussion ofthe detail of the text, representatives of corporate actors also began to play amore significant role. Jacques Gorlin of the IPC remained close to the USnegotiating team while European business was well represented by RalfWalter, Head of Patents at Unilever, who became a mover in articulating theviews of European industry for the benefit of EC delegates and furthermobilised European business interests in support of an Agreement.28

In November 1991 the Director General of GATT, Arthur Dunkel, issueda progress report identifying a range of intellectual property issues that stillrequired resolution.29 The report noted twenty issues that remainedunresolved in the draft TRIPs Agreement, for example in relation to term ofpatent protection, the availability of patents without discrimination withregard to place of invention, field of technology and whether the product wasimported or locally produced, the status of protection for computer programsand rental rights, while the issue of geographical indications for wines andspirits also remained unresolved (Stewart 1993: 2279). The report alsohighlighted the need to address the transitional periods that would be allowedfor developing countries before they would be required to fully comply withthe TRIPs Agreement and the need to link implementation of the Agreementto conclusion of the Uruguay Round as a whole (Stewart 1993: 2280).

The Dunkel Draft

The following month, on 20 December 1991, the Director General attemptedto achieve progress towards conclusion of the Uruguay Round by tabling aDraft Final Act Embodying the Results of the Uruguay Round of MultilateralTrade Negotiations (the so-called ‘Dunkel Draft’). The Dunkel Draft,presented as an all-or-nothing agreement designed to prevent parties fromcherry picking parts of the Draft that they found acceptable, included a newversion of the TRIPs Agreement,30 produced by the Director General in anattempt to broker a compromise between the differing positions of nationaldelegations (Blakeney 1995: 80). The Dunkel Draft excluded moral rights31

to take account of US opposition, but included protection of computerprograms as literary works to be covered by copyright protection under theBerne Convention. On rental rights, differences had to be overcome betweenJapan and the United States. In Japan, shops allowed customers to rentcompact discs for a fraction of the purchase price when authors had giventheir consent for rental to the public. Since Japanese record companies (suchas Sony) also tended to manufacture compact disc players with recording


features and the blank tapes required for making copies, it was rare thatsuch consent was denied. In the United States, the music industry wantedthe TRIPs Agreement to replicate US legislation, which allows recordcompanies to have the absolute right to prohibit commercial rental of theirworks (Stewart 1993: 2281–2). The IIPA, in particular, complained that theJapanese practice of allowing rental of compact discs would lead to widespreadprivate copying and loss of sales (Gervais 1998: 23). In effect, the DunkelDraft of TRIPs Agreement replicated existing Japanese law by allowingauthors to authorise or prohibit commercial rental to the public of copyrightworks. For the US music industry, this provision would exacerbate the problemby allowing other countries to take advantage of the Japanese rentalarrangements (Stewart 1993: 2283).32 To reach an Agreement, theseremaining differences between the interests of corporate actors in developedcountries would first need to be overcome, or at least put to one side.

As with negotiations for any multilateral treaty, the Dunkel Draft of theTRIPs Agreement was a document that necessarily reflected the concerns ofall main negotiating parties whose assent would be needed for the Agreementto be adopted. The European Communities had received its desired level ofprotection for geographical indications of wines and spirits, Japan had retainedthe right of authors to allow rental of copyright works, developing countries(supported by the European Communities) had ensured that plants andanimals could be excluded from patentability, and developing countries werealso allowed significant transitional periods of five years after the coming toforce of the Agreement, with an additional five years for pharmaceutical,agricultural and chemical products, before they were required to apply itsprovisions (Stewart 1993: 2284). A separate category of least-developedcountries was to be allowed an even longer ten-year transitional period acrossthe board before applying TRIPs. But, despite the inclusion of lengthytransitional periods, India remained sufficiently concerned about the likelyimplications of the TRIPs Agreement to abstain from giving a position onthe Dunkel Draft at all (Stewart 1993: 2284).

Meanwhile, in the United States, the pharmaceutical industry wasbecoming increasingly critical of the Dunkel Draft on grounds that developingcountries were being allowed too long a transitional period to implementpatent laws in accordance with the TRIPs Agreement (according to Blakeney1996b: 7; Weissman 1996: 1085). And while the pharmaceutical industryobjected to transitional periods for developing and least-developed countries,they also objected to the absence of ‘pipeline’ protection from the DunkelDraft (see also Gervais 1998: 23; Stewart 1993: 2285). Pipeline protectionwas seen as a vital component of patent law by proprietary pharmaceuticalmanufacturers because of the long time-lag between the patenting of a newchemical compound by the inventor and the point that the compound actuallyreceives regulatory approval to be used as a medicinal product by humans(for the industry position on pipeline protection, see IFPMA 1995: 32).Essentially, pipeline protection accords an additional period of patent life for


pharmaceutical products to take account of the long process of clinical trialsand market authorisation procedures that can result in eight to ten years ofthe twenty-year standard patent life of a medicinal product being used upbefore the drug even comes onto the market. The complaint of thepharmaceutical industry was therefore that the absence of pipeline protectionin the Dunkel Draft allowed an insufficient period of exclusive marketingrights for a company to recoup the investment in research and developmentrequired to produce new and innovative drugs.

The Motion Picture Association of America (MPAA) also opposed theDunkel Draft, in this case on grounds that the system used to collect royaltieson videos marketed in the European Communities discriminated against UScompanies because of the exceptions to be allowed in TRIPs to the principleof national treatment. The MPAA also complained that the United States’system of corporate (as opposed to individual) ownership of motion pictureswas not reflected in the text, raising the possibility that the Hollywood filmstudios could be refused royalty rights on the grounds that they were notauthors of the work (see also Gervais 1998: 25; Stewart 1993: 2286).Furthermore, in relation to royalties on videos, the MPAA objected to theFrench practice of imposing a levy on the cost of blank video cassettes andvideo recorders, with income from the levy then used to support the Frenchfilm industry. Under French arrangements, foreign companies were onlyentitled to a small proportion of the levy collected through their status asauthors. The MPAA and the IIPA both complained that allowing Frenchdistributors of the material to receive a larger share of the levy was contraryto the principle of national treatment (Stewart 1993: 2281). The motionpicture industry called instead for the TRIPs Agreement to embody theprinciple of full national treatment on private copying levies. Thedissatisfaction of US business interests was compounded by what was seen asthe relative weakness of the TRIPs Agreement as a mechanism for achievingintellectual property protection compared with the proven effectiveness ofthe Special 301 bilateral approach (according to Evans 1994: 174). Given theextent of their concerns, representatives of the US movie industry kept full-time staff working on these issues in Geneva right up to the signing of theTRIPs Agreement.33

During 1992 attention once again shifted away from the draft TRIPsAgreement as tensions between the United States and EuropeanCommunities over agricultural subsidies and quotas threatened to destabilisethe whole Uruguay Round negotiating process (Ryan 1998: 111). It was notuntil the end of 1992, once differences on agricultural issues had beenovercome, that TRIPs returned to the fore. At that stage, both India and theUnited States proposed further revisions to the Dunkel Draft. Taking up themantel of complaints from the pharmaceutical industry, the United Statesagain proposed the inclusion of pipeline protection in the Agreement, whilethe issue of national treatment of copyright owners was also put back on thenegotiating table to counter the movie industry’s complaints about practices


such as the French video levy (Stewart 1993: 2286). India, on the other hand,still opposed the principle that the TRIPs Agreement should allow rightholders to hold the exclusive right to market patented products and alsowanted the inclusion of a requirement that right holders ‘work’ (i.e.manufacture) the patent locally (Stewart 1993: 2286–7). For developingcountries, the draft TRIPs Agreement still contained much that they did notlike (Ryan 1998: 112) but, despite the initial pessimism of at least one of thekey corporate players in the European business community (Unilever’s RalfWalter feared that intellectual property protection would eventually beabandoned in the final Uruguay Round agreements), ultimately the GATTpackage as a whole contained major benefits for developing countries in otherareas. GATT deals relating to agricultural and textile quotas providedsignificant payoffs to developing countries willing to accept the TRIPsAgreement (see also Gorlin 1999: 5).

In the final stages of negotiations for the TRIPs Agreement, the focusshifted (Stewart 1993: 2287), with less emphasis on dealing with the concernsof developing countries and more time spent dealing with cracks that werebeginning to appear in the US–Europe–Japan alliance that had brought theidea of a TRIPs Agreement so close to fruition. In particular, there were stilldifferences outstanding between the United States and Japan on rental rightsfor copyright works, between the United States and the EuropeanCommunities on geographical indications for wines and spirits, and betweenthe United States and the European Communities on French video levies forthe movie industry. But, in the event, the potential gains of the TRIPsAgreement for developed countries far outstripped the remaining differencesbetween the United States, the European Communities and Japan, garneringconsensus in favour of a successful outcome.

The Draft Final Act

When Arthur Dunkel, Director General of GATT, tabled the Draft Final ActEmbodying the Results of the Multilateral Trade Negotiations, the draftTRIPs Agreement,34 it was, with minor amendments, the same as the finalversion of TRIPs adopted at the conclusion of the Uruguay Round inMarrakesh on 12–15 April 1994 (Blakeney 1995: 80; 1996a: 545–6). Ratherthan reinvent international intellectual property law, negotiators had soughtto recycle existing WIPO conventions. All substantive provisions of the Parisand Berne conventions, with the exception of moral rights on which the UnitedStates held particular objections, were incorporated by reference into theTRIPs Agreement (see also Gervais 1998: 26). To this framework the TRIPsnegotiators added new provisions on issues about which national delegationsheld particular concerns, such as US concerns on rental rights for moviesand compact discs and European Communities concerns on geographicalindications. With the inclusion of limited exceptions and transitional periodsto appease developing countries, the negotiators of the TRIPs Agreement


then added the crucial enforcement and dispute settlement procedures thathad been so absent from the earlier ‘toothless’ WIPO conventions. In sum,the TRIPs Agreement that constitutes Annex 1C of the WTO Agreementadopted at the conclusion of the Uruguay Round forms the central componentof an interlocking web of international law, taking into account the referencesof the earlier WIPO conventions and the dispute settlement procedure ofthe WTO. A detailed analysis of the text of the TRIPs Agreement isundertaken in the next chapter, setting out the scope of each of its legalprovisions and providing analysis of areas where differences occurred in thevarious versions of the draft Agreement that were tabled during thenegotiating process.

Business involvement during the Uruguay Round

The corporate lobby maintained its good relations with the delegationsrepresenting developed countries throughout the Uruguay Roundnegotiations on intellectual property protection. US officials in Geneva werein frequent contact with their national industries via the IPC, the IIPA andPhRMA (according to Drahos 1995: 13; Ryan 1998: 109), who, in turn, providedtechnical and legal expertise and advocacy skills based on years of experiencein international intellectual property protection (Drahos 1995: 15). The IIPAand the Business Software Alliance (BSA) provided the USTR with acontinuous stream of data on trade losses accrued by US companies as aresult of inadequate intellectual property protection in other countries (seeDrahos 1995: 11). Since there was no other information available, the USTRbecame largely reliant on information provided by US companies.

Equally, the EC delegation received important business input fromEuropean business, and UNICE in particular, while Japanese business advisedits government delegation via Keidanren. The three business groups providedexpert advice to negotiators in Geneva on an ad hoc basis, while thepublication of the trilateral ‘Basic Framework of GATT Provisions onIntellectual Property’ in 1988 offered national delegations a clear statementof business views on which they could base their negotiating positions (seealso Doane 1994: 475; Sell 1998: 137). Although it has been criticised bysome commentators for containing insufficient detail and having only the‘political purpose’ of rallying support for global intellectual propertyprotection (see, for instance, Emmert 1990: 1321), the success of the BasicFramework was exactly that. Armed with the trilateral document,representatives of multinational companies at CEO level were then able totravel to Geneva and personally present their arguments to staff of the GATTSecretariat and to national delegations of GATT Member countries (Enyart1990: 55). In undertaking this task, they also found new allies among thebusiness communities in newly industrialised countries of South East Asiawho were also willing to support the trilateral approach.35 For de Koning(1997: 66), the reliance on industry data gave a one-sided approach to the


nature of the problem. But the reality was that they had little alternative.The influence of business interests was undoubtedly crucial to the developedcountries’ negotiating positions on intellectual property protection duringthe Uruguay Round and played an important role in influencing policydecisions.

Assessment

By the final stages of the Uruguay Round negotiations, developing countrieshad long given up their resistance to the TRIPs Agreement (see alsoBraithwaite and Drahos 2000: 63). The trilateral alliance between the UnitedStates, the European Communities and Japan, supported by their industryexperts, had played a crucial negotiating role (see also Drahos 1997: 210).Special 301 bilateral initiatives by the United States had also proved effectiveas a means of undermining resistance. Related to the threat of Special 301actions was the fact that developing country opposition to the TRIPsAgreement also ebbed away towards the end of the Uruguay Round becauseof the inclusion of the dispute settlement procedures within the package ofmeasures for TRIPs implementation. Dispute settlement, it was hoped,offered developing countries some respite from the threat of US tradesanctions (see also Ryan 1998: 13).

Towards the end of the Uruguay Round, developing countries were alsoexperiencing ‘negotiation fatigue’ (Braithwaite and Drahos 2000: 197) or, atleast, a problem of information deficiencies and lack of technical expertisein relation to intellectual property with only about ten countries actuallysending intellectual property experts to the TRIPs negotiations. In themajority of cases, the heads of delegations to the TRIPs negotiations werefrom national trade ministries or directorates, in some instances, augmentedby officials from the national patent offices, but even in these cases the patentoffice officials were career civil servants who were not necessarily aware ofthe impact that TRIPs obligations on particular business sectors in developingcountry economies (according to Gorlin 1999: 6). There was also a lack ofreal understanding among developing country delegations about how far-reaching the economic and social implications of the TRIPs Agreement werelikely to be (Drahos 1997: 207). Several developing countries were simplyrepresented by generalist Trade Counsellors from national PermanentMissions to the UN in Geneva (Balasubramanium 2000), even though thesenegotiators were expected to deal with highly technical and complex legalissues (Gervais 1998: 13). In the absence of the necessary legal expertisewithin their national administrations, developing countries simply did nothave the knowledge necessary to negotiate effectively on the content of theTRIPs Agreement.

In contrast, developed country delegations to GATT meetings had accessto the highest level of business advice, this proving to be the most effectivemethod for delegates to acquire the negotiating expertise they required. EdPratt, CEO of Pfizer, was an adviser to the US Official Delegation at Punta


del Este (Drahos 1995: 13). Although India and Brazil did formulate counter-proposals to the TRIPs Agreement, these were evaluated by Counsel fromUS industry, who were able to advise the US government negotiating team inGeneva and allow them to ‘pull rank’ in terms of technical expertise(according to Drahos 1995: 15). As Ryan has expressed this, ‘The TRIPsAgreement may have, in an immediate sense, rested on the economic powerand diplomatic aggressiveness of the United States. But American powerand aggressiveness would have come to little if a detailed agreement draftedby intellectual property specialists had not been on the table’ (Ryan 1998:93).

Perhaps most crucially, the Uruguay Round offered developing countriesa high level of potential in terms of issue-linkage and package deals acrosssectors, particularly in relation to textiles and agriculture. When negotiationson the TRIPs Agreement were finally concluded, it appeared that ‘linkage-bargain diplomacy’ (Ryan 1998: 92) had played a significant role. The linkagebetween trade and intellectual property would not have been an effectivenegotiating tool during TRIPs negotiations had it not been for the fact that,once the opposition of developing countries began to wane, a coherent set ofproposals was already on the table in the form of a draft TRIPs Agreement(see also Ryan 1998: 93).

Business succeeded in getting most of what it wanted in the TRIPsAgreement, with industry demands clearly reflected in the final agreement(Sell 1995: 182), particularly in relation to the principle of national treatment,patent term, restrictions on compulsory licences and the reversal of the burdenof proof in process patent infringement cases (Sell 1995: 182). Industrydemands were reflected clearly in the final TRIPs Agreement (Sell 1998:138). Indeed, Bennett (1994: 32) has described the conclusion of negotiationson the TRIPs Agreement as ‘a victory for US industry’ while Sell (1995)directly attributes the USTR’s vigorous pursuit of countries with inadequateintellectual property laws through Special 301 actions to the role played byprivate sector actors and, for Enyart (1990: 56), ‘[i]ndustry has identified amajor problem in international trade. It crafted a solution, reduced it to aconcrete proposal and sold it to our own and other governments.’ The claimwhich has been made that, in many ways, US companies succeeded in gettingmost, if not all,36 of what they wanted in the TRIPs Agreement certainlyholds some resonance. The proposals openly advocated by the businesscommunity on issues such as patent duration and restrictions on the use ofcompulsory licences are clearly reflected in the final agreement. Whether ornot business groups did, in fact, achieve their main goals in the TRIPsAgreement now remains contingent on whether the enforcement of TRIPsAgreement provisions can be achieved in countries that are signatories tothe Agreement. In this respect, the role of multinational companies in policingthe new intellectual property system will be crucial. As will be discussed inChapter 4, it seems likely that industry groups will continue to monitordevelopments in intellectual property rights in developing countries (see alsoSell 1995).

3 Content of the TRIPsAgreement

The successful conclusion of negotiations for the TRIPs Agreement saw theintroduction of measures that covered the whole spectrum of intellectualproperty rights. The TRIPs Agreement built upon the legal base provided byearlier WIPO conventions, including those of Paris and Berne, but alsoconstituted much more than a simple re-codification of international law.On the one hand, the TRIPs Agreement was an exercise in updating andrevising conventions administered by WIPO but, on another level, its noveltylay in the fact that for the first time in international law there was anobligation to provide minimum standards of intellectual property protectionof a real and binding character. In particular, the transparency arrangements,enforcement mechanisms and linkage to the dispute settlement procedureof the WTO that are discussed in detail in Chapter 4 added much to thearrangements that already existed under WIPO.

Before undertaking that review of enforcement mechanisms in Chapter4, this chapter first offers a provision-by-provision description of the finaltext of the Agreement on Trade-Related Aspects of Intellectual PropertyRights (the TRIPs Agreement) indicating, in particular, those issues thatwere subject to heated debate during the Uruguay Round negotiations anddescribing the basis on which compromise was reached before the TRIPsAgreement was finally adopted. To assist the reader, a full text version of theTRIPs Agreement can be found in the appendix. Read in conjunction withthe full text, this chapter provides an explanatory background for assessingthe implementation, impact and future of the TRIPs Agreement in laterchapters. Again to assist the reader, headings used in this chapter reflectthose found in the definitive version of the Agreement.1

PART I: GENERAL PROVISIONS AND BASIC PRINCIPLES

Nature and scope of obligations

As with the previous WIPO-administered conventions, the TRIPs Agreementsets down minimum standards for intellectual property protection. Article1.1 leaves the possibility for Members to implement more extensive protection

Content of the TRIPs Agreement 47

than required by the Agreement in domestic law, provided that such protectiondoes not contravene the provisions of the TRIPs Agreement. In addition,Article 1.1 makes clear that TRIPs is not intended to be a harmonisationdocument since Members are free to determine the method of implementingthe Agreement within their own legal system and practice.

Article 1.3 requires Members to accord the treatment provided for in theAgreement to nationals of other Members, with nationals of other Membersunderstood as those natural or legal persons that would meet the eligibilitycriteria under the Paris Convention, the Berne Convention, the RomeConvention and the Washington Treaty on Intellectual Property in Respectof Integrated Circuits, assuming a position as if all Members of the WTOwere also Members of those conventions.

Intellectual property conventions

In relation to patents, Article 2.1 explicitly requires Members to comply withArticles 1–12 and 19 of the Paris Convention (1967), which set out the basicstandards and principles of protection, while the relationship between theTRIPs Agreement and the other WIPO conventions is clarified by Article2.2, which maintains that nothing in the Agreement shall derogate fromexisting obligations that Members have to each other under the ParisConvention, the Berne Convention, the Rome Convention and theWashington Treaty.

National treatment

National treatment, namely non-discrimination against foreign nationals,as set out in Article 3, has been described as the most important ‘basicprinciple’ contained in the TRIPs Agreement (Reichman 1995: 347). Article3.1 requires that WTO Members confer treatment to nationals of otherMembers no less favourable than that which it accords to its own nationalswith regard to the protection of intellectual property, subject to the exceptionsalready provided in the Paris, Berne and Rome conventions and in theWashington Treaty. In any event, the principle of national treatment is alreadyestablished by the Paris, Berne and Rome conventions, so in this respectArticle 3.1 merely re-emphasises well-established principles (see also Blakeney1996b: 40). However, Article 3.1 also extends the national treatment principlefurther in relation to performers, producers of phonograms and broadcastingorganisations where rights are provided under the TRIPs Agreement.

Exceptions to the national treatment principle are allowed under Article3.2 in relation to judicial and administrative procedures, including thedesignation of an address for service or the appointment of an agent withinthe jurisdiction of a Member. However, these exceptions are only allowed inso far as is necessary to secure compliance with laws and regulations that arenot inconsistent with the TRIPs Agreement and where such practices do notconstitute a disguised restriction on trade.

48 Content of the TRIPs Agreement

Most-favoured-nation treatment

Whereas the national treatment provisions are designed to prohibitdiscrimination between a Member’s own nationals, the most-favoured-nationmeasures set out in Article 4 require that nationals of other Members shouldalso be treated without prejudice. Article 4 states that any advantage, favour,privilege or immunity granted by a Member to nationals of any other countrywith regard to intellectual property protection shall be accorded immediatelyand unconditionally to the nationals of all other Members. Exceptions to thisprinciple are permitted for any advantage, favour, privilege or immunity of ageneral nature and not confined to intellectual property protection; grantedunder the Berne or Rome conventions and authorising that the treatmentaccorded be a function not of national treatment but of the treatmentaccorded in another country; in respect of the rights of performers, producersof phonograms and broadcasting organisations not provided under the TRIPsAgreement; or deriving from international intellectual property agreementswhich entered into force before the WTO Agreement, provided suchagreements do not constitute an arbitrary or unjustifiable discriminationagainst nationals of other Members.

Multinational agreements on acquisition or maintenanceof protection

Under Article 5, the provisions of the TRIPs Agreement on national treatment(Article 3) and most-favoured-nation treatment (Article 4) do not apply toprocedures provided in intellectual property agreements concluded underthe auspices of the World Intellectual Property Organisation.

Exhaustion

In the United States, the European Communities and Japan it is possible fora contract of sale for patented goods to specify limitations on the buyer’sright to export or re-sell the goods, elsewhere it is often the case that no suchrestriction is possible. The issue of whether the first sale of a patented goodcan exhaust the rights of a patentee has been the subject of widespread debateand, during the TRIPs negotiations, it was the European Communitiesdelegation that insisted on watering down earlier drafts of the Agreementwhich would have dealt more conclusively with the exhaustion of rights issue.As it was, the final version of the TRIPs Agreement leaves unresolved theissue of exhaustion, with Article 6 declining to address internationalexhaustion and merely specifying that, subject to Articles 3 and 4, nothing inthe TRIPs Agreement will be used to address the issue of exhaustion ofintellectual property rights.2

This omission from the TRIPs Agreement is particularly detrimental toholders of pharmaceutical patents, book sellers relying on copyright protection


and trademarks holders, since it means that WTO Members are free to allowinternational exhaustion in national law, but are under no obligation to doso. In the case of pharmaceutical patents, drug pricing in the industry hastended to vary from country to country depending on the particularcircumstances in national economies and health care systems, with nationalmarkets segmented and attempts made for countries with higher-pricedproducts to be shielded from imports from markets with lower-priced goods.For book sellers, the absence of measures to prevent parallel importationwas the major disappointment in the TRIPs Agreement.3 In relation totrademarks, a mark holder is not generally considered to have the right toprevent the parallel importation of trademark-protected products, with theimported products often then sold at a lower price than domestically producedproducts displaying the same mark. The trademark holder cannot preventimportation because rights are generally exhausted after first sale of theproduct. Despite the efforts of representatives of trademark holders, theTRIPs negotiations failed to reach agreement on the inclusion of a clausethat would have prevented parallel importation by allowing trademark holdersto prevent the importation of protected products (see also Blakeney 1996b: 42).

Objectives

Article 7 provides the declaratory statement that ‘protection and enforcementof intellectual property rights should contribute to the promotion oftechnological innovation and to the transfer and dissemination of technology,to the mutual advantage of producers and users of technical knowledge andin a manner conducive to social and economic welfare, and to a balance ofrights and obligations’. Although the practical effect of this statement isunlikely to be great, it does reflect very clearly the concerns of developingcountries during the TRIPs negotiations that any agreement should not harmaccess to technologies and thus hinder the development of these countries.

Principles

Concerns voiced by developing countries also provided the motivation forArticle 8. Article 8.1 sets out that, in amending national laws and regulations,Members may adopt measures necessary to protect public health and nutritionand to promote the public interest in sectors vital to their socio-economicand technological development, provided that such measures are consistentwith the TRIPs Agreement. Article 8.2 adds that appropriate measures maybe needed to prevent the abuse of intellectual property rights, or the use ofpractices which unreasonably restrain trade or adversely affect internationaltechnology transfer, provided that such provisions are consistent with theTRIPs Agreement.


PART II: STANDARDS CONCERNING THE AVAILABILITY,SCOPE AND USE OF INTELLECTUAL PROPERTY RIGHTS

Section 1: copyright and related rights

Copyright concerns the legal protection of the expression of an idea (ratherthan the idea itself) in a tangible fixed form.4 The author must demonstrateoriginality in the work. The copyright holder is accorded the exclusive rightof reproduction, distribution, adaptation, performance and display of thecopyrighted work. Additional ‘neighbouring’ rights may be accorded to, forexample, the producer and broadcaster of visual and sound recordingsprotected by copyright.

Given the potential value of copyright through licensing arrangementsand royalty rates in relation to books, music, film, databases and computersoftware, business saw the potential for benefits being derived from highstandards of copyright protection being included within a TRIPs Agreement.From the early 1970s onwards, the unauthorised copying of copyrighted workshad become a major commercial problem with significant losses accruing,for example, to the book publishing industry as a result of the proliferationof lithographic photocopying machines, and to the music industry throughthe relative ease with which sound recordings could be copied onto cassettesby means of home taping. The movie industry was also suffering large lossesas a result of pirated video cassettes.

Relation to Berne Convention

During the Uruguay Round negotiations, it was recognised that the BerneConvention already, for the most part, provided adequate basic standards ofcopyright protection (see also Otten and Wager 1996: 397). Consequently,the TRIPs Agreement adopts well-established copyright standards. Article9.1 requires Members to comply with Articles 1–21 of the Berne Convention(1971), but does not require compliance with Article 6bis of the Convention,relating to moral rights. Individual Members are free to instigate a systemof moral rights nationally outside the scope of the TRIPs Agreement and, inparticular, as part of their general obligations as signatories of the BerneConvention (Blakeney 1996b: 52).

As indicated in Chapter 2, the issue of moral rights proved to becontroversial for the United States. The protection of moral rights, includingthe right to be known as the author of the work and the right to preventothers from making deforming changes, is enshrined in the Berne Convention,to which signatories to the TRIPs Agreement in turn agree to adhere. Butalthough the United States is a signatory to both the Berne Convention andthe TRIPs Agreement, US copyright law does not make provision for theprotection of moral rights. Historically, opposition to according moral rightsto the author has arisen because of the dominant position of the Hollywoodmovie studios, which tend to be the owner of film scripts rather than the


author of the work holding copyright. The United States was able to becomea signatory to the Berne Convention without actually amending its copyrightlaw on moral rights, because at the time it was able to argue that US lawprotects moral rights through various legal instruments including libel law,invasion of privacy, misappropriation of publicity rights, the federal trademarkstatute and contract law (Stewart 1993: 2288).

Consequently, during negotiations for the TRIPs Agreement, whereas theEuropean Communities, Japan, Switzerland and developing countriesproposed the inclusion of measures to ensure the protection of moral rightsin the final text, the United States preferred to make reference to the‘economic’ rights of the Berne Convention that were freely and separatelyexploitable and transferable (see Stewart 1993: 2289), an implicit referenceto the distinction between non-transferable moral rights of the author andthe economically transferable nature of other copyrights. It is against thisbackground of opposition from the United States and its movie industry tothe inclusion of moral rights that the final text of the TRIPs Agreement wasdevised, requiring Members to comply with the provisions of the BerneConvention and its Appendix, but with the express exclusion of Article 6bis –namely the provision relating to the protection of moral rights.

Article 9.2 confirms the conventional interpretation of copyright protectionas extending to ‘expressions, not to ideas, procedures, methods of operationor mathematical concepts as such’, thereby protecting the dichotomy betweennon-protectable ideas and protectable expressions (Blakeney 1996b: 46).

Computer programs and compilations of data

In order to keep copyright protection up to date with technologicaladvancements, the TRIPs Agreement adopts a ‘Berne plus’ (Reichman 1995:370) strategy, according to which Article 10.1 extends protection to computerprograms, whether in source or object code, to the type of subject matter tobe treated as a ‘literary works’ under the Berne Convention (1971). SimilarlyArticle 10.2 extends the scope of the Berne Convention by according copyrightprotection to compilations of data, whether in machine readable or otherforms, which by reason of the selection or arrangement of their contentsconstitute intellectual creations. However, it is also clear from Article 10.2that protection shall only relate to intellectual creations and not to the dataor material itself. In TRIPs negotiations leading to the extension of copyrightprotection to include forms of ‘literary work’ outside the scope of the BerneConvention, there was broad agreement among the developed countries thatthe pace of technological progress required an extension of traditional notionsof literary work, within the meaning of the Berne Convention, in order thatboth software and database compilations could benefit from copyrightprotection. As a result of widespread recognition in developed countries thathigh technology industries required the benefit accorded by copyrightprotection, Article 10 of the TRIPs Agreement explicitly extended copyrightprotection to compilations of data and databases and to computer software.


Rental rights

Article 11 grants authors (and their successors in title) of computer programsand cinematographic works the right to authorise or prohibit the commercialrental to the public of copyright works. In particular response to thecontentious issue of video rental rights in France, the outcome of TRIPsnegotiations was to insert a second sentence in Article 11, asserting that aMember ‘shall be excepted from this obligation in relation to cinematographicworks unless such rental has led to widespread copying of such works whichis materially impairing the exclusive right of reproduction conferred in thatMember on authors and their successors in title’.

Term of protection

The Berne Convention, under Article 7.1, specifies that the term of protectionfor copyright works is the life of the author plus an additional fifty years or,alternatively, fifty years after it has been made. What is less clear on readingthe Berne Convention is the status of copyright work where a natural personcannot be identified on which to base the period of protection. Article 12 ofthe TRIPs Agreement clarifies this by setting out that when the term ofcopyright protection of a work, other than a photographic work or a work ofapplied art, is calculated on a basis other than the life of a natural person,such a term shall be no less than fifty years from the end of the calendar yearof authorised publication or, in the absence of such authorised publication,fifty years from the end of the calendar year of making.

Limitations and exceptions

Under Article 13 Members are required to ‘confine limitations or exceptionsto exclusive rights to special cases which do not conflict with a normalexploitation of the work and do not unreasonably prejudice the legitimateinterests of the right holder’.

Protection of performers, producers of phonograms (soundrecordings) and broadcasting organisations

In what Reichman (1995: 368) describes as a ‘bold move’, the TRIPsAgreement takes into account the copyright concerns of the entertainmentindustry by recognising not only the rights of performers, but also theneighbouring rights of producers and broadcasting organisations. In relationto copyright infringement of phonographic works, business interests playedan important role in demonstrating the global scale of the problem and thecosts accruing to industry as the result of lost sales through bootlegging,home taping and, a more recent phenomenon in the early 1990s, compactdisc burning (or ‘ripping’). Through organisations such as the InternationalFederation of Phonographic Industries (IFPI), the Recording Industry


Association of America (RIAA), the National Music Publishers’ Association(NMPA) and the IIPA, the music business was able to put its case to TRIPsnegotiators for the inclusion of protection for sound recordings within theTRIPs Agreement.

Within the TRIPs Agreement, rights relating to sound recordings,performers’ control of fixation, reproduction and broadcasting of theirperformances are set out in Article 14. Under Article 14.1 performers havethe right to authorise or prohibit the fixation of their unfixed performancesand the reproduction of such a fixation of their work withoutauthorisation. Performers also have the right to prevent the broadcastingand communication to the public of their live performance.

Under Article 14.2 producers of phonograms have the right to authoriseor prohibit the direct or indirect reproduction of their phonograms, whereasunder Article 14.3 broadcasters are accorded the right to authorise or prohibitthe fixation, reproduction of fixations and the re-broadcasting of theirbroadcasts. In this regard, Article 14 of the TRIPs Agreement underpins therights of performers, producers and broadcasters by obliging WTO Membersto abide by the terms of the Rome Convention (1961).

Article 14.4 tackles a difficult issue in TRIPs negotiations, namely Japan’sarrangements for the rental of phonographic works. According to Article14.4, if, on the date of the conclusion of the GATT Uruguay Round, a Memberhad in force a system of equitable remuneration of right holders in respect ofthe rental of phonograms, that Member may maintain such a system providedthat the commercial rental of phonograms is not giving rise to the materialimpairment of the exclusive rights of reproduction of right holders. Materialimpairment of this type entails abuse of rental by widespread unauthorisedcopying of rented works (see also Blakeney 1996b: 48).

As with other forms of copyright works, under Article 14.5 the term ofprotection accorded to performers and producers of phonograms is fifty years,in this case being a period calculated from the end of the calendar year inwhich the fixation was made or the performance took place, with term ofprotection granted to broadcasters being at least twenty years from the endof the calendar year in which the broadcast took place.

In relation to TRIPs negotiations leading to the inclusion of neighbouringrights for producers and broadcasters in the Agreement, as with moral rightsit was the United States that voiced opposition to its inclusion in the finaltext. Given that neighbouring rights are designed to protect the interests ofperformers, broadcasters and producers of sound recordings, it was the USentertainment industry that on this occasion objected most forcefully to whatwas being proposed. The root of the problem lay in the fact that the UnitedStates was not a signatory to the Rome Convention for the Protection ofPerformers, Producers of Phonograms and Broadcasting Organisations. TheUnited States was of the view that the rights of performers and broadcasterscould be protected adequately without special legislation (Stewart 1993: 2290).As with moral rights, the United States argued that neighbouring rights


should not be included in the TRIPs Agreement. In the event, the US concededon the issue of neighbouring rights, with Article 14.6 of the TRIPs Agreementmaking explicit reference to both conditions, limitations, exceptions andreservations to the granting of copyright as allowed under the RomeConvention, together with explicit reference to the analogous status of Article18 of the Berne Convention (1971) as it relates to the rights of performersand producers of phonograms.

Section 2: trademarks

The need to provide effective protection for trademarks, although notcontested by developing countries (according to Pacón 1996: 346), was highon the agenda of developed nations given the rise in instances of counterfeitinggoods in the international market and is covered in some detail in Section 2of the Agreement.

Protectable subject matter

Section 2 of the TRIPs Agreement defines the minimum rights that must beconferred by a trademark. Article 15.1 defines the scope of trademarkprotection under the TRIPs Agreement as relating to ‘any sign, or combinationof signs capable of distinguishing the goods or services of one undertakingfrom those of other undertakings, shall be capable of constituting atrademark’. Where signs are not inherently capable of distinguishing therelevant goods or services, Members shall ‘make registrability dependent ondistinctiveness acquired through use. Members may require, as a conditionof registration, that signs be visually perceptible’.

Article 15.2 then limits the scope of Article 15.1 by setting out that it‘shall not be understood to prevent a Member from denying registration of atrademark on other grounds, provided that they do not derogate from theprovisions of the Paris Convention (1967)’. In this context, the ParisConvention allows for the refusal of registration on grounds of a list ofpossibilities including, for example, marks that are contrary to morality orpublic order and which may be of such nature as to deceive the public.

A key issue during TRIPs negotiations was how to reconcile therequirement for registration of a trademark under US and Canadian law foractual use or intention to use, whereas other countries have traditionallyoperated systems in which trademark rights may be acquired either throughcommon use or formal registration (Blakeney 1996b: 55–6). In order toreconcile the divergent approaches of the North American legal traditionswith those found elsewhere, the final text of Article 15.3 takes account ofboth approaches, providing that, ‘Members may make registrability dependon use. However, the actual use of a trademark shall not be a condition forfiling an application for registration. An application shall not be refused solelyon the ground that intended use has not taken place before the expiry of aperiod of three years from the date of application’.


Rights conferred

Under Article 16.1, the owner of a trademark is granted exclusive right ofuse where the use of an identical sign for identical goods and services tothose in respect of which the trademark is registered where such use wouldresult in a likelihood of confusion. Article 16.2 seeks to strengthen protectionfor internationally well-know marks, determining the existence of a ‘well-known trademark’ by taking account of the knowledge of the trademark inthat Member country as a result of the promotion of the trademark.

Exceptions

Article 17 allows Members the scope to provide limited exceptions to therights conferred by a trademark, such as fair use of descriptive terms, providedthat such exceptions take account of the legitimate interests of the owner ofthe trademark and of third parties.

Term of protection

Article 18 provides that trademark registration shall be for no less than sevenyears, to be renewable indefinitely.

Requirement of use

Article 19 requires that registration of a trademark may be cancelled onlyafter an uninterrupted period of at least three years of non-use, unless thereare valid reasons based on obstacles to such use.

Other requirements

Article 20 is designed to ensure that the use of a trademark will not beunjustifiably burdened with special requirements, ‘such as use with anothertrademark’ or ‘use in a manner detrimental to its capability to distinguishthe goods or services of one undertaking from those of other undertakings’.

Licensing and assignment

In addition to granting the owner of a registered trademark the right toassign the trademark, Article 21 prohibits the compulsory licensing oftrademarks, conferring upon an owner the exclusive right to assign the mark.In this respect, this final version of the TRIPs Agreement differed fromdeveloping country proposals, which sought to leave conditions for use of atrademark and duration of the protection granted to individual countries(see also Stewart 1993: 2301). For Pacón (1996: 347–8), there is a tendencyfor developing countries to view foreign trademark license agreements witha particularly critical eye given the economic and psychological advantage


enjoyed by foreign trademarks over national ones that can affect thedevelopment of the local economy as well as the purchasing behaviour of(and the supply of basic materials to) the domestic population. Contract termsbetween foreign licensors and national licensees in developing countries thatimpose a maximum amount on royalties, a refusal to approve the payment oflicense fees by domestic branches or subsidiaries to the parent company, orthe imposition of taxes on royalties are still possible under the TRIPsAgreement provided that they do not infringe Article 20.

Section 3: geographical indications

Protection of geographical indications

During the TRIPs negotiations, the European Communities (and France inparticular) were anxious to use the TRIPs Agreement to protect ‘appellationsof origin’, particularly for winemaking regions such as Champagne, Burgundyand Côtes du Rhône. Additional protection was needed in order to resolvedifferences between the European Communities and the United States ininstances where descriptive names for wines of European origin had becomecommonly used for wines produced, for instance, by Californian vineyards.Consequently, Article 22.2 of the TRIPs Agreement requires countries toprovide the legal means to prevent the use of any geographical indicationthat misleads the public as to the true origin of goods, as well as any use thatwould constitute an act of unfair competition. In addition, under Article 22.3,any trademark that contains a geographical indication is to be refused orinvalidated if it consists of a geographical indication not relating to theterritory stated. Article 22.4 extends protection to any geographical indication‘which, although literally true as to a territory, region or locality in which thegoods originate, falsely represents to the public that the goods originate inanother territory’.

Additional protection for geographical indications for wines andspirits

Under Article 23.1, additional protection for geographical indications isprovided for wines and spirits that are to be protected even where there is nodanger of the public being misled as to the true origin because of the use ofexpressions such as ‘kind’, ‘type’, ‘style’, ‘imitation’ or the like. This level ofprotection constitutes a more comprehensive level of protection than thegeneral provisions set out under Article 22 (see also Blakeney 1996b: 72).

International negotiations: exceptions

Article 24 sets out a list of exceptions to the obligation to protect geographicalindications. Article 24.4 excludes from protection any geographical indication


that has been used for at least ten years before the conclusion of the UruguayRound of Multilateral Trade Negotiations or registered in good faith beforethat date. Article 24.6 provides exemption for ‘products of the vine for whichthe relevant indication is identical with the customary name of a grape varietyexisting in the territory of that Member as at the date of entry into force ofthe WTO Agreement’. Under Article 24.9, where a geographical indicationhas fallen into disuse in the country to which it relates, there is no obligationto protect.

Section 4: industrial designs

Requirements for protection

Articles 25.1 places an obligation on WTO Members to protect independentlycreated industrial designs where these are new and original. With a view torecognising the concern of developing countries relating to the protection oftextile design (Blakeney 1996b: 79), Article 25.2 provides that the cost ofregistration should not impair the opportunity to seek and obtain suchprotection.

Protection

Under Article 26.1 ‘the owner of a protected industrial design shall have theright to prevent third parties not having his consent from making, selling orimporting articles bearing or embodying a design which is a copy, orsubstantially a copy, of the protected design’, with limited exceptions providedunder Article 26.2 and, under Article 26.3, a duration of protection lasting atleast ten years.

Section 5: patents

Patentable subject matter

For industries operating in high technology sectors, patent protection is ofcrucial importance. Article 27.1 accords patent protection to any inventions,whether products or processes, provided they are new, involve an inventivestep and are capable of industrial application.5 Article 27.1 also strengthensthe patent right by prohibiting patent discrimination based on the place ofinvention, field of technology or whether the product is imported ordomestically produced. This wording of Article 27.1 seeks to address problemsarising in relation to developing countries, where local working requirementsare often imposed and certain categories of product, particularlypharmaceuticals and agrochemicals, are excluded from patent protection onpublic policy grounds. The fact that Article 27 specifies that patent rightsare ‘enjoyable without discrimination as to the place of invention, the field


of technology and whether products are imported or locally produced’ was animportant achievement for developed countries during the TRIPs negotiations(see also Ryan 1998: 113).

One discrepancy between US intellectual property law and that of otherdeveloped countries that could not be easily resolved was the debate overwhether to use a first-to-file or a first-to-invent principle for determining theright of priority in patent applications. In the United States, where the first-to-invent system is used, business argues that awarding patents to inventorswho can demonstrate through carefully recorded log books that they holdpriority is preferable to first-to-file system used in other countries, where a‘race to the patent office’ may result in a patent being awarded to the firstinventor to file a patent application, not to the first person to invent. Thesystem used elsewhere has been criticised by US firms for being unnecessarilybureaucratic and favouring larger businesses, which have the experience andresources to file patent applications regularly, over small firms and the soleinventor,6 and for creating legal uncertainty and undue litigation by leavingopen the opportunity for rival inventors to present log books demonstratingthat it was in fact they who first invented a patented product.

Despite attempts by the European Communities to include a requirementthat all signatories to the TRIPs Agreement adopt the first-to-file system forpatent applications, the United States had already made its intransigenceclear with the so-called ‘Manbeck Compromise’ (a unilateral declaration bythe US Assistant Secretary of Commerce repudiating an earlier US pledgeto WIPO members that it would move to a first-to-file system).7 There waslittle surprise, therefore, that the US delegation to the TRIPs negotiationswas opposed to changing US domestic legislation. Although the issue of first-to-file was not addressed in the final text of the TRIPs Agreement andcontinues to be an issue of debate in bilateral negotiations between the UnitedStates and the European Communities,8 what the Agreement neverthelessdoes require is that Members do not discriminate in the availability of patentprotection according to the place of invention.

In relation to the scope of patentable subject matter, although the majorityof developed countries supported the US position that no exclusions shouldbe granted for plants and living organisms, the European Communitiesnonetheless sided with the developing country view that exceptions shouldbe granted in relation to the patentability of plants and animals (Stewart1993: 2295). The reason for the EC position was that it faced strong internalopposition to the patenting of living organisms (see Watal 1999: 9). The finaloutcome of the negotiating process was therefore the list of exceptions allowedunder Article 27. In particular, Article 27.2 excludes from patentabilityprotecting ordre public or morality; protecting human, plant or animal life orhealth; and avoiding serious prejudice to the environment. These exceptionshave been criticised on grounds that they are very broad and, without anarrowing interpretation or interpretative statement, could be read asallowing the continued exclusion of certain pharmaceutical products and


processes from patentability (see also Doane 1994: 478; Gorlin 1993: 37; Ryan1998: 113). After a proposal by developing countries,9 Article 27.3 also givesWTO Members the right to exclude from patentability diagnostic, therapeuticand surgical methods for the treatment of humans or animals, as well asplants, animals other than micro-organisms and essentially biologicalprocesses for the production of plants or animals other than non-biologicaland microbiological processes. However, Members are required to providefor plant variety protection either by patents or by an alternative sui generissystem of protection, in most cases likely to be the International Conventionfor the Protection of New Varieties of Plants (the UPOV Convention of 2December 1961), which is further discussed in Chapter 6 of this book. Thisoutcome was reached because, although the United States argued in favourof patent protection, the European Communities favoured a sui generis formof protection (Pacón 1996: 344–5).

Although Article 27 has been criticised as substantially limiting protectionfor the growing biotechnology industry (Doane 1994: 478), it does benefitfrom a built-in review mechanism, with the wording of Article 27.3 makingclear that these issues will be reviewed four years after the entry into force ofthe Agreement establishing the WTO. It was consequently anticipated thatthe provisions of Article 27.3 of the TRIPs Agreement would be reviewed atthe Seattle WTO Ministerial Meeting in December 1999. In the event,however, procedural matters and public disorder at the Seattle MinisterialMeeting stymied discussion on substantive review of Article 27.3. The built-in review nonetheless remains to be concluded in the future and itsimplications are further discussed in Chapter 6.

Rights conferred

Article 28 provides patent holders with the exclusive right to make, use orsell, import assign or transfer a patent through license. Where the subjectmatter of the patent is a process, the owner is granted the exclusive right touse, offer for sale, sell or import products obtained directly by that process.

Conditions on patent applications

Article 29 requires Members to ‘disclose the invention in a manner sufficientlyclear and complete for the invention to be carried out by a person skilled inthe art and may require the applicant to indicate the best mode of carryingout the invention known to the inventor at the filing date or, where priority isclaimed, at the priority date of application’.

Exceptions to rights conferred

The TRIPs Agreement also contains exceptions to the exclusive rights ofpatent holders. Article 30 sets out that such exceptions must not unreasonably


conflict with the normal exploitation of the patent nor unreasonably prejudicethe legitimate interests of the patent holder. As will be discussed in Chapter5, this provision has proved particularly problematic in relation to the so-called ‘Bolar Exemptions’ for regulatory approval procedures.

Other use without authorisation of the right holder

The ‘other use without authorisation’ provisions of Article 31 relate primarilyto compulsory licensing, arrangements whereby developing countries havetraditionally tended to utilise arrangements requiring the patent holder to‘work’ the patent locally within a fixed period (normally two or three years)after the patent is granted or be subject to a compulsory licence under whichthe patent is licensed to a local business in return for reasonable royaltyrates. During the TRIPs negotiations, developed countries proposed that theuse of such licences be restricted not least because, for businesses operatinga global marketing strategy, this requirement to undertake localmanufacturing (or ‘working’) of a patent, rather than manufacturing on aregional scale and then importing into a particular national market, wasseen to be an onerous and commercially unviable requirement. The UnitedStates, in particular, was of the opinion that the use of compulsory licencesshould be severely restricted and used only in cases of antitrust violation ornational emergency (Stewart 1993: 2295). In the event, the final text of theTRIPs Agreement, while not restricting the use of compulsory licences tothe degree proposed by the United States, does not include failure to work apatent locally as grounds for compulsory licensing. It is clear from Articles27 and 31 that local working requirements for compulsory licensing can besatisfied through the importation of patented products if this is sufficient tomeet local needs. This ensures that the patent holder is not required toproduce the product in every national market where it is patented in order toavoid the granting of a compulsory licence to another party.

Under Article 31(a) compulsory licences must be considered on theirindividual merits. This has been interpreted as excluding blanket approvalof compulsory licences for a particular field of technology (Blakeney 1996b:91). In addition, compulsory licensing will only be permitted if prior effortshave been made to obtain authorisation from the right holder on reasonablecommercial terms and conditions (Article 31(b)), except in the case of anational emergency or other circumstances of urgency, or in cases of publicnon-commercial use, typically relating to public health and national defence.The scope and duration of compulsory licences must be limited to the purposefor which it was authorised (Article 31(c)). They must be non-exclusive(Article 31(d)), be non-assignable (Article 31(e)), be predominantly for thesupply of the domestic market of the Member authorising such use (Article31(f)), include the payment of adequate remuneration to the patent holder(Article 31(h)) and be subject to judicial review (Article 31(i)). There arealso limitations on the use of compulsory licences for the exploitation of


dependent patents (Article 31(l)), namely a patent on an improvement to aninvention within the scope of an earlier dominant patent (see also Doane1994: 479).

The task of complying with the provisions of the TRIPs Agreement oncompulsory licences will not be easily complied with by developing countries.These countries have often relied on compulsory measures to obtain accessto technology and pharmaceutical products (for a fuller discussion of theimpact of the TRIPs Agreement on developing countries, see Chapter 5).Given that Grubb (1999: 40) reports that in 1995 even the EuropeanCommission found that not a single Member State had fully complied withthe compulsory licensing provisions of the TRIPs Agreement, it should be oflittle surprise that developing countries so often encounter problems in thisrespect.

Revocation/forfeiture and term of protection

Article 32 of the TRIPs Agreement requires that an opportunity must existfor judicial review of any decision to revoke or forfeit a patent. Article 33establishes the minimum duration of patent protection in any Membercountry as being twenty years from the date of filing. Although this durationof patent term replicates the requirements of the Paris Convention and wasgenerally supported by developed country delegations to the TRIPsnegotiations, the European Communities, the United States and Japan werenot of one mind on this issue (Pacón 1996: 341). The European Communities,pursuing the European Patent Convention approach, advocated that the termof patent protection is twenty years from filing of the application, to beextended for a further five years in special circumstances, such as in the caseof pharmaceutical products required to undergo lengthy regulatory approvalprocedures before being released onto the market. The United States andJapan, on the other hand, argued twenty years should be the minimum termof protection, with Members free to set longer periods of protection if they sowished. The developing countries were also divided on this issue, leading totheir recommendation that patent term should be at the discretion of eachMember, with the precise duration of patent protection being a matter fornational legislation. The term of twenty years was nonetheless enshrined inthe final text of the Agreement. In practice, the requirement of a twenty-year patent term has been a relatively straightforward obligation for mostWTO Members to fulfil, with many, including Argentina, Brazil, Indonesiaand the Philippines, making this change as early as the beginning of 1997(according to Grubb 1999: 40).

Process patents: burden of proof

Article 34 sets out certain conditions under which, in the case of civil litigationrelating to the infringement of process patents, when the product obtained


by the patented process is new (Article 34.1(a)), or when there is a substantiallikelihood that the identical product was made by the process and the ownerof the patent has been unable through reasonable efforts to determine theprocess actually used (Article 34.1(b)), the burden is on the alleged infringerto prove that the identical product was produced by a different process. Theeffect of Article 34 of the TRIPs Agreement is that it is now up to the partyaccused of marketing an identical product to that of the patent holder toprove that the process used in its manufacture does not infringe the patent.This provision was in line with the proposals of developed countries duringTRIPs negotiations and is perceived to offer a regime more favourable topatent holders from developed nations, who would otherwise find the task ofproving an infringement of a process patent an unnecessarily onerous task.

Pipeline protection

But despite the many successes of developed country negotiation strategiesin terms of the final version of the TRIPs Agreement, not all key demandswere met. Of crucial importance to businesses operating in the proprietarymedicines sector had been the demand that pharmaceuticals still indevelopmental or market-approval stages be subject to ‘pipeline’ protection’(see also Grubb 1999: 87; Ryan 1998: 88), with the effect that the duration ofmarket approval and drug testing undertaken by national agencies, such asthe Food and Drug Agency (FDA) in the United States or the EuropeanMedicines Evaluation Agency (EMEA), would be able to benefit from a largerproportion of the twenty-year patent life for a particular pharmaceuticalproduct when it is finally brought to market. In effect, clinical trials andmarket approval would not erode the term of protection for patentedmedicinal products. Despite discussion of the need to include pipelineprotection in Article 70(8) of the Agreement, in the event it was not includedin the final text, largely because developed countries were split on this issue,with the United States in favour of pipeline protection, the EuropeanCommunities against and Japan offering no firm view. 10 The absence ofpipeline protection was seen as particularly harmful for the pharmaceuticalindustry, which had already seen benefits accrue from the inclusion of pipelineprotection in US bilateral trade agreements and the NAFTA Agreement.

Section 6: layout designs (topographies) ofintegrated circuits

Relation to the IPIC Treaty

Layout designs (or ‘topographies’) of integrated circuits had been dealt within international intellectual property law before the TRIPs Agreement bythe Washington Treaty on Intellectual Property in Respect of IntegratedCircuits of 26 May 1989. During TRIPs negotiations, the EuropeanCommunities and developing countries both submitted that the Washington


Treaty should apply through incorporation into the TRIPs Agreement. Thisdiffered from the position taken by the United States, which argued insteadfor reciprocity of foreign layout designs without explicit reference to theWashington Treaty on grounds that the Treaty had very few signatories(Stewart 1993: 2306). Since the term of protection of eight years providedfor by the Washington Treaty was less than the term of ten years sought bythe two countries responsible for the largest integrated circuit industries,namely the United States and Japan (Blakeney 1996b: 96), both thosecountries had refused to become signatories to the Washington Treaty. Theresult was that the integrated circuits provisions of the TRIPs Agreementhave been criticised by some of the business representatives interviewed aspart of the research for this book as being a ‘third world’ draft.

The approach to the incorporation of integrated circuit protection intothe TRIPs Agreement has been to utilise the base provided by the WashingtonTreaty. Article 35 of the TRIPs Agreement requires Members to provide forthe protection of the layout-designs of integrated circuits in accordance withArticles 2–7 (other than paragraph 3 of Article 6), Article 12 and paragraph3 of Article 16 of the Washington Treaty. During TRIPs negotiations, thisincorporation of the Washington Treaty into the TRIPs framework had beenadvocated by developing countries on the grounds that the recently completedTreaty represented the international consensual approach (Blakeney 1996b:97) but, in line with the developed country perspective that the WashingtonTreaty also required strengthening, Articles 36 to 39 of the TRIPs Agreementsupplement Article 35.

Scope of the protection

Article 36 requires Members to consider unlawful importing, selling, orotherwise distributing for commercial purposes, a protected layout-designor an integrated circuit in which a protected layout-design is incorporated,without the prior authorisation of the right holder.

Acts not requiring the authorisation of the right holder

Yet notwithstanding the provisions of Article 36, Article 37.1 permits suchacts ‘where the person performing or ordering such acts did not know andhad no reasonable ground to know, when acquiring the integrated circuit …that it incorporated an unlawfully reproduced layout-design’, subject to payingthe right holder a reasonable royalty. Non-voluntary licensing for use by thegovernment is also permitted under Article 37.2, subject to the conditionsfor compulsory licensing of patents laid out earlier in the Agreement.

Term of protection

Crucially, under Article 38.1, the Washington Treaty on Intellectual Propertyin Respect of Integrated Circuits (1989) is supplemented by the requirement


that protection must be available for a minimum period of ten years (asoriginally favoured by the United States and Japan in negotiations for theWashington Treaty), beginning with registration filing or first commercialexploitation or, under Article 38.3, fifteen years after the creation of thelayout-design.

Section 7: protection of undisclosed information

Developing countries opposed the inclusion of trade secrets as a category ofintellectual property and, as such, the issue did not come under the remit ofthe TRIPs Negotiating Group. Nevertheless, the commercial value ofundisclosed information (trade secrets or know-how), as advocated bydeveloped countries, is given recognition in international public law for thefirst time in Article 39 of the Agreement. Article 39 requires Members toprotect undisclosed information (the term trade secret is not used per se) aslong as it has commercial value because it is secret and is kept secret. Itsinclusion in the TRIPs Agreement has particularly important implicationsfor the proprietary pharmaceutical industry, which has particular concernsabout the protection of commercially sensitive information submitted as partof the regulatory approval procedures undergone while obtaining marketauthorisation for new medicinal products.

Largely as a result of pharmaceutical industry concerns, Article 39.1requires that in the course of ensuring effective protection against unfaircompetition as provided for in Article 10bis of the Paris Convention (1967),which defines an act of unfair competition as ‘any act of competition contraryto the honest practices in industrial or commercial matters’, Members mustprotect undisclosed information.

Article 39.2 then sets out the range of information to be protected as beingthat which ‘is secret in the sense that it is not, as a body or in the preciseconfiguration and assembly of its components, generally known among orreadily accessible to persons within the circles that normally deal with thekind of information in question’; ‘has commercial value because it is secret’;and ‘has been subject to reasonable steps under the circumstances, by theperson lawfully in control of the information, to keep it secret.’

Finally, Article 39.3 specifically seeks to address the particular concernsof the proprietary pharmaceutical industry, which must seek regulatoryapproval from public bodies such as the US FDA or the EMEA. Article 39.3requires that, where undisclosed test or other information is required in orderto grant market authorisation, Members protect information on newpharmaceutical or agricultural chemical products that utilise new chemicalentities against unfair commercial use, except where necessary to protectthe public. Attempts were made during negotiations for the TRIPs Agreementto ensure that information included in regulatory submissions of this typewould be protected for a specific length of time. In the event, however, theabsence of a standard term of protection in developed countries prevented a


consensus being reached that could then be put forward as a proposal for theTRIPs Agreement. The global proprietary pharmaceutical industry has sinceexpressed its concerns that ‘unfair commercial use’ is not defined in Article39.3, increasing the likelihood that generic drug companies will benefit fromhaving greater access to data submitted to regulatory authorities.

Section 8: control of anti-competitive practices incontractual licences

During negotiations for the TRIPs Agreement, developing countries beganto be more vocal in their concerns that increased intellectual propertyprotection would result in abuse by rights holders. Interest grew in preventingthe imposition of anti-competitive provisions in contractual licences, withcontract restrictions seen as being capable of hindering the transfer oftechnology to developing nations (see also Pacón 1996: 349). These calls foranti-competitive measures were, in part, addressed in the final text of theTRIPs Agreement by Article 8.2, which permits Members to take appropriatemeasures to control abuse of intellectual property rights by right holderswho use anti-competitive practices to unreasonably restrain trade or adverselyaffect the international transfer of technology. Article 8.2, in effect, is designedto address the abuse of contractual licensing agreements. But the maininstrument designed to control anti-competitive provisions in contractuallicences is Article 40. Article 40.1 acknowledges that certain types of licensingagreements can restrain trade and may impede the transfer and disseminationof technology. In the light of this acknowledgement, Article 40.2 reserves theright for Members to provide for legislation to prevent licensing practices orconditions that may in particular cases constitute an abuse of intellectualproperty rights amounting to anti-competitive practices. Article 40.3 sets upa mechanism for extraterritorial investigation and enforcement (see alsoBlakeney 1996b: 118) by providing for consultation, with Article 40.4 creatingthe conditions for further cooperation through the supply of information (seealso Otten and Wager 1996: 403) by allowing the opportunity for the Memberwhere the alleged infringer is a citizen or domiciled to enter into consultationswith the Member in which the alleged infringement has occurred.

PART III: ENFORCEMENT OF INTELLECTUALPROPERTY RIGHTS

The need to achieve effective international enforcement of intellectualproperty rights was a key driving force behind the developed countries’initiative for a TRIPs Agreement capable of overcoming the shortfalls of theearlier WIPO conventions (see also Worthy 1994: 197). Enforcement refersto the procedures set out in the Agreement that provide for action againstany act of infringement of intellectual property rights covered by the TRIPs


Agreement. The provisions of the TRIPs Agreement on enforcement havetwo basic objectives. First, they seek to ensure that effective means ofenforcement are available to right holders. Second, they endeavour to ensurethat enforcement procedures are applied in such a manner as to avoid thecreation of barriers to legitimate trade and to provide safeguards againsttheir abuse (see also Otten and Wager 1996: 403; Smith 1997: 17). But itshould be stated at the outset that it is widely perceived that while the TRIPsAgreement is an extremely good document in terms of defining internationalnorms for intellectual property protection, its provisions relating toenforcement clearly display the characteristics of a difficult compromisereached during the Uruguay Round negotiations.

The aim of Part III is to ensure that the provisions on protection ofintellectual property rights found elsewhere in the TRIPs Agreement can beenforced by the right holders themselves (see also Smith 1997: 30). In manycases these right holders will be multinational companies operating in localmarkets and, in this context, Part III directly concerns the ability of corporateinterests to defend their intellectual property rights effectively on a globalscale.

Section 1: general obligations

Given that the failure of the Paris and Berne conventions was largelyattributed to the absence of effective mechanisms to enforce WIPO-administered treaties (see also Henderson 1997: 652), developed countriesarticulated the concerns of corporate interests by insisting from the outsetthat the TRIPs Agreement must contain enforcement provisions within theoverall framework of the GATT. Despite the opposition of developingcountries, which suggested that enforcement should take account of the limitsof administrative and resource capabilities in each country, the final text ofTRIPs reflects developed country proposals that the Agreement shouldprovide for civil, criminal and administrative enforcement, together withremedies in the form of damages, injunctions and seizure of infringing goods.

Under Article 41 of the TRIPs Agreement, Members are required to ensurethat enforcement procedures are available under their national laws so as topermit effective action against infringement of intellectual property rights,including expeditious remedies to prevent infringements and remedies thatconstitute a deterrent to further infringements (Article 41.1). Members arerequired to set up effective national enforcement measures for rights holders,with certain minimal obligations including fair and equitable procedures,that are not unnecessarily complicated or costly and should not entailunreasonable time-limits or unwarranted delays (Article 41.2); to set upprocedures to ensure that decisions are based only on the merits of the caseand only on evidence in respect of which the parties were offered theopportunity to be heard (Article 41.3); and to provide the opportunity for


judicial review (Article 41.4). Article 41.5, included in the TRIPs Agreementat the suggestion of India11 to take account of the capacities of developingand least-developed countries (Wooldridge 1997: 15), stipulates that nothingin this part of the Agreement creates an obligation to put in place a judicialsystem for enforcement of intellectual property rights that is distinct fromthe system in place for the enforcement of laws in general.

Section 2: civil and administrative procedures andremedies

Fair and equitable procedures

Article 42 sets out civil judicial procedures, including the right to writtennotice, the right to independent legal counsel and the right to present relevantevidence. Members must make available fair and equitable remedies andprocedures as listed in later Articles of the Agreement, including injunctions,damages and indemnification. These provisions are discussed below.

Evidence of proof

Article 43 is designed to facilitate the production of evidence by accordingjudicial authorities with the power to order that evidence is produced by theopposing party when the complainant has presented reasonably availableevidence sufficient to support its claims and has specified that evidencerelevant to the substantiation of its claims which lies in the controls of theopposing party. Article 44 invests judicial authorities with the power to grantinjunctions, namely the power to order a party to desist from an infringementand block the importation of products infringing intellectual property rightsinto the channels of commerce in their jurisdiction. Article 45 gives judicialauthorities the power to award damages for infringement, and order thatinfringing goods be destroyed.

Injunctions

Under Article 44.1 judicial authorities have the power to order a party todesist from an infringement and to prevent imports of the infringing goods.This power is not as far-reaching as proposals put forward by the UnitedStates and European Communities during TRIPs negotiations. Article 44.1.2does not oblige Members to grant injunctions if the protected subject matteris protected by persons who, at the time of acquisition, believed in good faiththat trade with the subject matter would not result in an infringement. Thisgood faith provision was included despite the fact that the US and Japan hadstrongly opposed a similar provision in the Washington Treaty (Dreier 1996:262).


Damages

Article 45.1 invests judicial authorities with the power to order an infringerof intellectual property rights to pay the right holder adequate compensationin damages for losses suffered because of the infringement. Article 45.2 allowsjudicial authorities to order the infringer to pay the rights holder expenses,which may include appropriate attorney’s fees, and to order the recovery ofprofits and/or damages even where the infringer did not knowingly, or withreasonable grounds to know, engage in infringing activity.

Other remedies

Article 46 allows judicial authorities to order that goods found to be infringingintellectual property rights are disposed of in a manner that avoids harmbeing caused to the rights holder, or destroyed (unless this would be contraryto existing constitutional requirements). Any materials or implements thathave as their predominant use the creation of infringing goods must also bedisposed of. No compensation will be paid to the infringer in eithercircumstance, but a principle of proportionality and the interests of thirdparties must be taken into account.

Right of information

The infringer must inform the right holder of the identity of third partiesinvolved in the production and distribution of infringing goods or servicesand their channels of distribution (Article 47).

Indemnification of the defendant

If enforcement measures are found to have been abused, the judicialauthorities have the power to order the party at whose request measureswere taken to provide adequate compensation for the injury suffered,including appropriate attorney’s fees (Article 48.1). Public authorities andofficials are, however, exempt from liability if action has been taken in goodfaith (Article 48.2).

Administrative procedures

Under Article 49, any civil remedy that is ordered as a result of administrativeprocedures on the merits of the case must conform to principles equivalentin substance to Section 2, Part III, of the TRIPs Agreement, relating toenforcement of intellectual property rights.


Section 3: provisional measures

Under Article 50, judicial authorities are to be given the power to orderprompt and effective provisional measures to prevent infringement fromoccurring by stopping the distribution for sale or importation of infringinggoods and by preserving evidence of the alleged infringement (Article 50.1);to adopt provisional measures where there is a demonstrable risk of evidencebeing destroyed (Article 50.2); to require reasonably available evidence inorder to satisfy them that the applicant is the right holder (Article 50.3); toprovide notice to affected parties without delay (Article 50.4); to allow thedefendant to request the revocation of provisional measures (Article 50.6);and to provide compensation to the defendant where provisional measuresare revoked or lapse (Article 50.7).

Section 4: special requirements related to bordermeasures

Suspension of release by customs authorities

The TRIPs Agreement reflects the view that the preferred method ofcombating counterfeiting and piracy12 is to prevent the infringing activity atits source (see also Otten and Wager 1996: 405). Thus a significant elementof the TRIPs Agreement is the role it envisages for customs authorities asagencies to counter intellectual property infringement. Under Article 51Members are obliged to set up administrative and judicial procedures to betaken by customs officials for the suspension of release into domesticcirculation of counterfeit and pirated goods at national borders. In order tooblige customs officials to take action, the right holder must submit writtenevidence of infringement. Members may also set up equivalent measures todetain goods for export.

Application

Right holders initiating procedures under Article 51 must provide adequateevidence to satisfy the authorities that there is a prima facie case of aninfringement in intellectual property rights and must provide a sufficientlydetailed description of the goods to make them easily recognisable by thecustoms authorities (Article 52).

Security or equivalent assurance

The TRIPs Agreement also pays considerable attention to ensuring that civilactions are not used as a means of harassing legitimate trade (Otten and


Wager 1996: 406), Article 53.1 according competent authorities with the powerto require security or an equivalent assurance to protect the defendant andthe competent authorities and to prevent abuse. The level of security orassurance must not, however, unreasonably deter use of those procedures.

Under Article 53.2, the release of suspended goods will be made uponpayment of an amount sufficient to protect the right holder by the defendant,but payment of such a security must not prejudice any other remedy availableto the right holder, and the security will be returned if the rights holder doesnot pursue the action within a reasonable period of time.

Notice and duration of suspension, indemnification of theimporter and of the owner of the goods

Both the importer and applicant must be given prompt notification if customsauthorities decide to suspend the release of goods into the market (Article54). If the customs authorities have not been informed that legal proceedingshave been initiated within ten days, they will release the goods provided thatall other import or export conditions have been met (Article 55).Compensation may be paid to the importer, consignee or owner of the goodsfor injury caused by wrongful detention of goods (Article 56).

Right of inspection and information

Article 57 allows competent authorities to inform the right holder of thenames and addresses of the consignor, the importer and the consignee and ofthe quantity of the goods in question. This would clearly assist the right holderin its further investigation of those involved in the counterfeiting and piracyof goods (see also Blakeney 1996b: 137) and would assist the right holder inbringing any civil action in such a case.

Ex officio action

Article 58 creates the opportunity for Members to permit the competentauthorities to act upon their own initiative in suspending the release of goodswhere they have prima facie evidence that an intellectual property right isbeing infringed, subject to the opportunity for the importer to appeal, withpublic authorities and officials exempt from liability where action was takenin good faith.

Remedies

Under Article 59 the authorities may dispose of infringing goods and shouldnot normally allow the re-exportation of counterfeit trademark goods in anunaltered state.


De minimis imports

A de minimis principle applies whereby Members may exclude from theseprovisions small quantities of goods of a non-commercial nature containedin travellers’ personal luggage or sent in small consignments (Article 60).

Section 5: criminal procedures

Under Article 61 Members are required to provide criminal proceedings andpenalties in cases of wilful trademark counterfeiting or copying piracy on acommercial scale, with remedies including fines and imprisonment sufficientto act as a deterrent, together with the availability of remedies includingseizure, forfeiture and destruction of the infringing goods.

PART IV: ACQUISITION AND MAINTENANCE OFINTELLECTUAL PROPERTY RIGHTS AND RELATEDINTER PARTES PROCEDURES

The registration and maintenance of intellectual property rights is dealt within Article 62, which provides that Members must put in place reasonableprocedures and formalities (Article 62.1), with rights granted or registeredwithin a reasonable period of time so as to avoid unwarranted curtailment ofthe period of protection (Article 62.2).

PART V: DISPUTE PREVENTION AND SETTLEMENT

Criticisms that the Paris and Berne conventions had lacked appropriateenforcement provisions (as discussed in Chapter 1) were addressed in Part Vof the TRIPs Agreement. Furthermore, a suggestion by the EuropeanCommunities that the Agreement should provide for the establishment of aCommittee on Trade-Related Aspects of Intellectual Property Rights toimprove transparency and facilitate dialogue was taken up in Part V with theestablishment of the TRIPs Council.

Transparency

Article 63 of the TRIPs Agreement seeks to minimise disputes betweenMembers by requiring transparency of laws, regulations and administrativepractices and court decisions through the publication of relevant intellectualproperty instruments (Article 63.1). Under Article 63.2 each Member isrequired to report to the TRIPs Council (see below) on measures pertainingto the Agreement and, under Article 63.3, must be prepared to supplyadditional information on the extent to which intellectual propertyinstruments meet TRIPs obligations in response to a written request from


another Member, with the proviso that the withholding of information ispermitted on grounds of public or proprietary interest (Article 63.4). Theapplication of Article 63 is addressed in detail in the next chapter.

Dispute settlement

Despite proposals from developing countries that the TRIPs Agreementshould restrict itself to setting out procedures for consultative and conciliatorymeans of dispute resolution, the final text of the Agreement in fact reflectedthe developing country viewpoint that the GATT/WTO dispute settlementprocedure should be used in the context of TRIPs. As this is set out in thefinal text of the Agreement, when disputes between Members do arise inrelation to the TRIPs Agreement, Article 64 provides that recourse will bemade to the dispute settlement procedures set out in Articles XXII and XXIIIof GATT 1994. A formalised structure system of dispute resolution is providedthrough the express application of dispute settlement procedures tointellectual property rights under Article 64 of the TRIPs Agreement, wherebyTRIPs incorporates the provisions of Articles XXII and XXIII of the GATT,including the rules and procedures governing the settlement of disputes withinthe Understanding on Dispute Settlement.

PART VI: TRANSITIONAL ARRANGEMENTS

Transitional arrangements

In an attempt to alleviate some of the concerns of developing countries, whichargued that they needed time to adjust their economies and legal systems tomeet the requirements of the TRIPs Agreement (see also Doane 1994: 481),Articles 65 and 66 provide for a period of transition before the TRIPsAgreement comes into force and also allow Members to take measures againstthe abuse of intellectual property rights and clarifying the competence ofGATT and WIPO in relation to intellectual property matters.

Under Article 65.1, one year after the coming into force of the TRIPsAgreement, namely by 1 January 1996, developed countries were required tocomply with the TRIPs Agreement. Article 65.2 allowed developing countriesan additional four years from 1 January 1996 (until 1 January 2000) to bringtheir laws, regulations and practices into conformity with the new obligations,except in respect to the principles of national treatment (Article 3) and most-favoured-nation status (Article 4). Crucially, in terms of offsetting theimplications of the TRIPs Agreement for public health in developingcountries, an additional five years for implementation is also allowed underArticle 65.4 to enable developing countries to introduce patents in areas oftechnology, such as pharmaceutical products, not protected within theterritory of that Member prior to the entry into force of the TRIPs Agreement(see also Reichman 1995: 353).

Under the arrangements set out in Article 65, thirty-two developed


countries came forward to have national measures verified as being inaccordance with the Agreement on 1 January 1996, one year after TRIPsentered into force. But problems arose because the TRIPs Agreement omittedto provide a definition or definitive list of which particular countries mightconstitute a ‘developed’ or a ‘developing’ country. Article 65.2 of the TRIPsAgreement merely states that any ‘developing country’ is entitled to delayapplication of the TRIPs Agreement for a further period of four years. Theadvantages of Members being able to avail themselves of ‘developing country’status and delay implementation until 1 January 2000 are clear. Consequently,only the European Communities and its fifteen Member States (the EuropeanCommunities, represented by the European Commission, have membershipof the WTO) plus sixteen other WTO Members are classified as ‘developedcountries’. It is difficult to imagine the circumstances in which countriesincluding Israel, Hong Kong, Singapore South Korea and the Gulf stateswould designate themselves as ‘developing countries’ in other contexts.13 Thepharmaceutical industry has been particularly critical of relatively advancedcountries, such as Argentina and Turkey, which have taken advantage ofdeveloping country status transitional arrangements under the TRIPsAgreement (see Grubb 1999: 39). But such was the incentive structureprovided by the possibility of delay under the TRIPs Agreement transitionalarrangements that many countries chose to consider themselves developingcountries in this case. There is even anecdotal evidence that, during the finalstages of TRIPs negotiations, Canada attempted to designate itself a‘developing country’ in order to avail itself of the year 2000 deadline, althoughultimately it relented and agreed to take on the intellectual propertycommitments associated with developed nation status.

Least-developed country members

The only countries that are defined as an identifiable group for the purposesof transitional arrangements set out in the TRIPs Agreement are the ‘least-developed countries’, for which transitional arrangements were even moregenerous. Article 66.1 allows countries on the United Nations list of least-developed countries (UNCTAD 1994) ten years from the date of applicationof the TRIPs Agreement (i.e. 1 January 2005) to bring their laws, regulationsand administrative practices into conformity. The UN list currently comprisesforty-seven countries14 of which fifteen were WTO Members at the last count.Least-developed countries were further assisted with the inclusion of Article66.2, which required developed countries to provide incentives to enterprisesand institutions from their territories in order to promote and encouragetransfer of technology to least-developed countries, with the aim of creatinga sound and viable technological base.

Developed countries and business interests, however, criticised Articles65 and 66 of the Agreement on grounds that the transitional periods allowedwere too generous, given that the vast majority of developing countries werealready signatories to the Paris and Berne conventions. The transitional


periods were considered particularly onerous for the pharmaceutical sector(see also Doane 1994: 481; Ryan 1998: 118) because, under Article 65.4 ofthe Agreement, the additional extension of five years granted beforedeveloping countries were required to provide patent protection in areas notpreviously covered by their patent laws most typically applied topharmaceuticals and agrochemicals.

The ‘non-backsliding’ (Otten and Wager 1996: 408) or ‘standstill’ clausecontained in Article 65.5 also forbids countries from using the transitionalperiod to reduce the level of intellectual property protection in a way thatwould result in a lesser degree of consistency with the requirements of theTRIPs Agreement.

Technical cooperation

In order to assist developing countries during the transitional period, Article67 requires developed country Members to cooperate with developing countryMembers in the preparation of laws and regulations on the protection andenforcement of intellectual property rights, including support for setting upor reinforcing the relevant domestic offices and agencies, and the training ofpersonnel, for the protection of intellectual property rights. The practicalimplications of this provision are subject to a discussion in Chapter 5.

PART VII: INSTITUTIONAL ARRANGEMENTS; FINALPROVISIONS

Council for Trade-Related Aspects of Intellectual Property Rights

Article 68 provides for the establishment of a Council on Trade-RelatedAspects of Intellectual Property Rights (the TRIPs Council) to monitor theoperation of the Agreement, including monitoring Members’ compliance withtheir obligations. The TRIPs Council offers a continuing forum for dialoguebetween WTO Members on intellectual property matters and an informalmechanism for diffusing disputes before recourse is sought to the formaldispute settlement procedure (see also Ryan 1998: 115). Article 68 alsorequires the TRIPs Council to consult with the World Intellectual PropertyOrganisation in order to establish appropriate cooperation arrangementswith bodies of that Organisation (discussed in detail in Chapter 4).

International cooperation

In order to facilitate cooperation on combating trade in infringing goods,Article 69 sets out the declaratory statement that Members agree to cooperatewith one another with a view to eliminating international trade in goodsinfringing intellectual property rights, with the practical commitment that


they will notify contact points in their national administrations and be readyto exchange information (particularly between customs authorities) for thispurpose.

Protecting existing subject matter

Article 70 specifies that the TRIPs Agreement does not give rise to obligationsin respect of acts that occurred before the date of application of the Agreement(Article 70.1), except where specifically set out in the TRIPs Agreement(Article 70.2), with no obligation to restore protection to subject matter thathas fallen into the pubic domain on the date of application of the TRIPsAgreement (Article 70.3). For acts in which specific objects embodyingprotected subject matter that became infringing under legislationimplemented by a Member in conforming with the TRIPs Agreement, theremedies available to the right holder may be limited so that the acts continueto be performed, but with payment of equitable remuneration made to theright holder (Article 70.4).

TRIPs provisions relating to rental rights for phonographic works underArticles 11 and 14 need not be applied with retroactive effect for originals orcopies purchased prior to the application of the Agreement (Article 70.5).Members are not required to ensure that the scope of patent protectionprovided for in Article 27.1, whereby patents shall be enjoyable withoutdiscrimination as to their field of technology, if governmental authorisationfor use was given prior to the date of the TRIPs Agreement (Article 70.6).Where intellectual property rights are conditional upon registration andapplications were pending on the date of application of the TRIPs Agreement,the authorisation of such applications was to be amended to take account ofany additional protection granted by the TRIPs Agreement (Article 70.7).

Despite claims by multinational pharmaceutical companies that pipelineprotection was not included in the TRIPs Agreement, closer analysis of Article70.8 does indicate the existence of a limited form of protection under thetransitional arrangements for developing countries. Article 70.8 requires theimmediate protection of pharmaceutical and agricultural chemical inventionsthrough the establishment of a means by which patent applications relatingto these types of inventions can be filed. This is the so-called ‘mailbox’provision, whereby a Member country has to accept the filing of patentapplications from 1 January 1995. Article 70.9 then allows for exclusivemarketing rights for products where patent applications have been madeunder Article 70.8 for a period of five years prior to the granting or rejectionof a product patent application and provided that a patent has been grantedfor the same product in another Member and marketing approval alsoobtained in another Member.


Review and amendment

Article 71.1 contains an in-built review mechanism for the TRIPs Agreement.It requires that the Council for TRIPs shall review the implementation ofthe Agreement after the end of the transitional period allowed for developingcountries (namely after 1 January 2000) and then review implementationevery two years thereafter. Article 71.1 also allows the Council to undertakereviews on its own initiative in the light of any relevant new developmentsthat may warrant modification of the TRIPs Agreement.

Article 71.2 sets the mechanism by which the TRIPs Agreement will beadjusted with the purpose of achieving higher levels of protection of intellectualproperty rights. In such instances, amendments are to be referred to theWTO Ministerial Conference on the basis of a consensus proposal from theTRIPs Council. No provisions exists for the introduction of lower levels ofprotection by this or any other mechanism of the TRIPs Agreement.

Reservations

Article 72 makes clear that no Member may take advantage of reservationsin respect of any obligations under the TRIPs Agreement without firstreceiving the consent of other Members.

Security exceptions

Article 73 states that nothing in the TRIPs Agreement shall be construed torequire a Member to provide any information, the disclosure of which itconsiders would be contrary to security interests; or to prevent any Memberfrom taking action it considers necessary to protect security interests,fissionable materials or traffic in arms, ammunition or implements of wartaken at time of war or national emergency; or to prevent any Member fromtaking action to pursue its obligations under the United Nations Charter forthe maintenance of international peace and security.

Assessment

Before the TRIPs Agreement, signatories to international intellectualproperty agreements were frequently able to avoid the full impact ofinternational law by taking reservations on clauses in treaties or by notratifying certain protocols or conventions (see Braithwaite and Drahos 2000:63). Through the binding nature of the TRIPs Agreement, nationalderogations or failure to ratify were overcome by an unambiguousrequirement that all Members of the WTO must implement a common andenlarged set of intellectual property standards that, by reference to the variousearlier intellectual property conventions, incorporate a common set ofinternationally recognised standards of intellectual property protection into


the WTO framework. With clear-cut obligations enshrined in internationallaw, effective monitoring and enforcement of the TRIPs Agreement becameissues of crucial importance. The following chapters examine how suchmonitoring and enforcement procedures have worked in practice. As willbecome apparent, once again it is the role played by business interests thathas proved significant in this process.

4 Implementing the TRIPsAgreement

In order to ensure that TRIPs Agreement commitments entered into by WTOMembers are adhered to, national implementing legislation, administrativepractice and judicial arrangements must stand up to scrutiny under a set ofWTO institutional arrangements ‘designed to promote compliance’(Braithwaite and Drahos 2000: 64). The WTO Council for TRIPs (hereafterreferred to as the TRIPs Council) lies at the heart of these arrangements,with its role of ensuring transparency of implementation and enforcementmeasures through scrutiny and surveillance.

This chapter begins with an examination of the role of the TRIPs Council.It does so while placing particular emphasis on the interplay between theCouncil and global corporate actors. It suggests that global corporate actors,the prime movers behind the TRIPs Agreement, also perform a key functionin identifying countries that have failed to comply with its provisions. In thiscontext, the chapter demonstrates that global corporate actors have a keyrole in identifying recalcitrant states and providing governments of WTOMembers with evidence of non-compliance. As Reichman (1997: 352) puts it,many trade associations are prepared to ‘pursue an activist program’ in thisregard. However, there are risks implicit in this close proximity of corporateactors to the scrutiny process. Reichman (1997: 334) has also warned that,‘[i]f the Council for TRIPs allows itself to become primarily an instrumentfor top-down pressures exerted by strong transnational corporations, it couldaugment a spirit of resentment and resistance simmering in those developingcountries whose entrepreneurs must increasingly seek to defend the publicinterest in free competition in an integrated world market’. But for corporateactors from developed countries that wish to complain about judicial oradministrative inefficiencies that they encounter as rights holders indeveloping countries, there is also the requirement under Article 41(5) ofthe TRIPs Agreement that they demonstrate evidence of discrimination vis-à-vis local rights holders as opposed to genuine lack of resources or failure oflocal administrative or enforcement procedures to closely mirror those foundin their home country (see also Reichman 1997: 350).

Once WTO Members have undergone the TRIPs Council scrutiny process,the main instrument for ensuring effective implementation of the Agreement

Implementing the TRIPs Agreement 79

is the Dispute Settlement Procedure of the WTO. This chapter also suggeststhat it is global business interests that are playing a leading role in identifyingrecalcitrant states and bringing to the attention of their governments evidenceof non-compliance in foreign markets with the intention of stimulatingDispute Settlement actions by one WTO Member against another. The overalltheme of this chapter is therefore that it is the very same global corporateactors that played such a significant role in the formulation of the TRIPsAgreement that are now performing a leading role in monitoring nationalimplementation and enforcement measures. It suggests that the UruguayRound consensus among global corporate actors has continued through intothe implementation phase of the TRIPs Agreement, with organisationsrepresenting the proprietary pharmaceutical industry being particularlyprepared to cooperate on a global scale both in the exchange of informationand by lobbying their respective governments in the United States and theEuropean Communities for intervention via the TRIPs Council and theDispute Settlement Procedure. Yet, while the Uruguay Round consensusamong global corporate actors has continued through into the implementationphase of the TRIPs Agreement, the ability of global corporate actors toinfluence the international protection of intellectual property rights is nowalso constrained in two important respects. First, wider political anddiplomatic imperatives have limited the ability of the United States and theEuropean Communities to act in every instance of intellectual propertyinfringement brought to its attention by corporate actors. Second, theUruguay Round consensus among global corporate actors themselves isbeginning to fragment as a result of the intensity of complaints raised by USindustry via the USTR in both TRIPs Council and Dispute SettlementProcedure contexts, particularly in terms of copyright protection for software,film and television rights. Nevertheless, the chapter concludes that morefundamental problems of ensuring implementation of the TRIPs Agreementlie on the horizon in relation to intellectual property protection in developingcountries and these problems are ultimately likely to eclipse disagreementsthat have begun to undermine the Uruguay Round consensus on the TRIPsAgreement among global business actors.

The TRIPs Council, scrutiny and surveillance

The formal role of carrying out scrutiny and surveillance of national measuresimplementing the TRIPs Agreement,1 as set out in Article 63.2 of the TRIPsAgreement, lies with the TRIPs Council. Article 63.2 requires that WTOMembers notify the TRIPs Council of the relevant national laws andregulations so that all other Members can review that country’s operation ofthe TRIPs Agreement and ask questions to ascertain whether notifiedlegislation does in fact comply with obligations under the TRIPs Agreement.2

This coordination of scrutiny and surveillance work with a view to achievingtransparency of national implementation measures is one of the main roles

80 Implementing the TRIPs Agreement

of the TRIPs Council.3 The emphasis on scrutiny and surveillance, especiallyduring the transitional phases allowed for developing and least-developedcountries, is designed to motivate Members into changing legislation andadministrative procedures by putting pressure on them through the TRIPsCouncil in a ‘relatively non-confrontational’ (Reichman 1996: 368) mode thatstops short of Dispute Settlement Panels.

It is important to remember that differences in national legislationimplementing the TRIPs Agreement do not themselves amount to a breachof the Agreement’s provisions (see also Dreier 1996: 276). The TRIPsAgreement sets down minimum standards. Within the minimum standardsframework the Agreement is designed to accommodate diversity by allowingWTO Members to retain discretion as to the precise national provisions usedto ensure effective protection of intellectual property rights. The scrutinyand surveillance role of the TRIPs Council is designed to play a key role inproviding for the transparency of national arrangements necessary to ensurethat diversity does not amount to lax standards.

Once the transitional period for each category of countries has come to anend, each Member is required to submit two documents for scrutiny by theTRIPs Council. The first document is a notification attesting to how thenational laws of that country comply with the TRIPs Agreement. This is knownas an ‘Article 63.2 notification’.4 The second document is a checklist of issueson enforcement of intellectual property rights, which is a response by eachMember to a questionnaire sent to it by the TRIPs Council in order to monitorenforcement.5 Once these documents have been submitted, that Member issubject to a scrutiny process, during which all WTO Members (not only thosethat have already reached the end of the transitional period) are able to askadditional questions to ascertain how the national laws of the country underscrutiny are in accordance with the Agreement.6 As with the negotiations forthe TRIPs Agreement discussed in previous chapters, only WTO Members(not corporate actors, other organisations or individuals) may directly engagein this process.

Adrian Otten, Director of the Intellectual Property and InvestmentDivision of the WTO Secretariat, has identified five categories of benefitsthat arise from the TRIPs Council scrutiny process:

1 the effect of encouraging Members to take greater care in draftinglegislation;

2 clearing up misunderstandings otherwise likely to lead to disputes(termed the ‘mediatory’ role by Reichman 1997: 335);

3 identification of deficiencies in notified laws and regulations;4 identification of deficiencies in interpretation of TRIPs obligations; and5 providing information about how trading partners are implementing the

TRIPs Agreement (Otten 1998: 525).

But the scrutiny procedure, designed to facilitate the transparency of


national provisions, nonetheless has the potential to create a substantiallogjam of work for the TRIPs Council. Bearing in mind that, for the thirty-two developed countries that offered themselves up for scrutiny in 1996, over16,000 separate questions were posed by other TRIPs Council Members, thereis significant potential for questions posed of the more than ninety developingcountries for whom transitional arrangements ended in 2000 to create anadministrative and bureaucratic jungle from which the TRIPs Council wouldtake years to emerge.

Bureaucratic problems may well be exacerbated by the fact that there isno filtering mechanism to prevent duplication, with the same question beingasked by more than one Member. During the pre-2000 transitional period,one method of preventing the build-up of work for the TRIPs Council wasseen to be encouraging developing countries to come forward early for scrutiny,so enabling them to ‘run in’ (Otten and Wager 1996: 409; Braithwaite andDrahos 2000: 63) their new intellectual property and enforcement regimesprior to becoming internationally liable for their performance. Particularpressure was exerted on Hong Kong and Singapore in this respect, with theargument made that submitting themselves for scrutiny early would thenallow those countries greater access to the advice and expertise of theinternational community in order to ensure that they made the necessaryadjustments prior to the end of the transitional period. In the event, however,no developing countries chose to come forward early for TRIPs Councilscrutiny. The reason was that they were reluctant to jeopardise theirdeveloping country status in any future WTO Agreements.

Despite the widely held view in the European Communities that there arein reality only twenty or thirty developing countries of sufficient commercialimportance as to require scrutiny by the TRIPs Council as a matter of priority,the view of the policy community in the United States remains far morepessimistic. In the United States, there are concerns among corporate actorsthat a ‘Millennium timebomb’ is waiting to explode now that the transitionalperiod for developing countries has come to an end. These concerns are basedon the belief that developing countries are deliberately prevaricating in takingsteps to introduce national implementing legislation. More pertinently, thesefears have been directed towards a distinction based on an acknowledgementthat while appropriate legislation is generally now on the statute books indeveloping countries, practical administrative measures to ensure protectionof intellectual property rights locally have yet to be put in place. The problemfor the TRIPs Council in undertaking scrutiny of developing countryenforcement of intellectual property rights therefore remains a very realone of bureaucratic complexity and administrative burden.

The workload of the TRIPs Council is further exacerbated by the fact thatcountries that have joined the WTO since the completion of the UruguayRound are not eligible to avail themselves of the transitional periods, whatevertheir status as developing or least-developed countries. In a process akin tonew Member States of the European Communities taking on the full acquis


communautaire from day one of their membership, new WTO Members mustlikewise immediately demonstrate enforcement of the TRIPs Agreement. Inthis respect, it is not sufficient for a country to demonstrate that it has goodintellectual property laws on its statute books. Severe problems of piracy andcounterfeiting, often controlled by organised crime syndicates, present theTRIPs Council with clear shortcomings in the practice of intellectual propertyprotection that cannot be readily addressed by means of the purelyadministrative powers at its disposal. It is the shortcomings of administrativepractice in developing countries that can be most effectively addressed bymeans of advice and training of local officials. The potential for assistance ofthis type to improve implementation problems in developing countries isdiscussed in Chapter 6, with particular reference given to the role of globalcorporate actors in promoting best practice.

With regard to the thirty-two developed countries that put themselvesforward for TRIPs Council scrutiny in the first wave, there have been fewsubstantive issues of difficulty in implementing the TRIPs Agreement.Greater problems are anticipated when, at the end of transitional periodsfor developing and least-developed countries, they too are required todemonstrate implementation.7 This discrepancy between the likelihood ofimplementation problems in developed and developing countries arisesbecause the TRIPs Agreement more closely reflects existing law and practicein developed nations than it does the aspirations and preferences of thedeveloping world. Yet the administrative burden placed on the TRIPs Councilin relation to developed country scrutiny has itself not been insignificant.The fact that almost half of the questions put to the UK in the TRIPs Councilscrutiny process came from one WTO Member – the United States – offerssome indication why this has been the case. The reason, according to businessrepresentatives and policy-makers in the United States who were interviewedfor this book, for the high number of questions asked by the US delegation tothe TRIPs Council is that to allow an apparent lack of appropriateenforcement of the TRIPs Agreement by the UK to go unchecked would sendthe wrong message to developing countries that lax enforcement standardsare acceptable. US business has therefore urged continued vigilance on thepart of the USTR as a way to keep up pressure for effective enforcement ofglobal intellectual property rights and ensure that the TRIPs Agreement,for which they fought so long and hard, remains something more than justan empty shell.

Yet the potential for ongoing bureaucratic complexity in the TRIPs Councilscrutiny process can be seen precisely in the nature of the some of the fourteenquestions posed by the United States of the United Kingdom. For instance,the United States asked the United Kingdom: ‘Please explain whetherprocedures, permissible under Article 51 of the TRIPs Agreement, areavailable to stop the export of goods suspected of infringing copyright and/ortrademarks’ and ‘Article 54 requires that the importer and the applicant benotified promptly of the suspension or release of goods. Please specify the


period within which the competent authority [is required] to issue a noticethat the release of goods has been suspended’. The respective responses givenby the UK8 that, ‘As set out in the responses from the United Kingdom toQuestions 15 and 16 of the “Checklist” …’ and ‘This question has beenadequately answered in the United Kingdom Responses to Questions 15–17of the “Checklist” …’ indicate that there is great potential for repetition ofinformation that has already been provided if TRIPs Council Members chooseto be overly rigorous or pedantic in the volume and nature of the questionsthat they choose to pose.

That is not to say, however, that the European Communities have not alsobeen vigilant in monitoring compliance with the TRIPs Agreement in theterritories of other WTO Members. A number of complaints raised by theEuropean Communities before the WTO Dispute Settlement Procedure arediscussed later in this chapter. There have not, however, been many instancesin which Members of the TRIPs Council have been able to criticise the UnitedStates for its provisions implementing the TRIPs Agreement, despite thefact that US measures have been portrayed as ‘inadequate’ because of itsreluctance to abandon a number of long-standing discriminatory provisionsin domestic law (see Wegner 1996: 381). But the fact that the United Stateshas not faced sustained criticism over its implementation of the TRIPsAgreement is perhaps less surprising given that the TRIPs Agreement hadits origins so firmly rooted in proposals initiated by the United States duringthe Uruguay Round, with the effect that the text of the final agreementalready closely mirrored existing law and policy in that country.9

Global corporate actors, scrutiny and surveillance

Attitudes in the European Communities with regard to ensuring effectiveimplementation of the TRIPs Agreement are, on the face of it, similar tothose in the United States. The major difference is that corporate sponsorshipof politicians plays such an overt role in ensuring direct industry influence ofUS trade policy, whereas in the European Communities corporate actors mustuse their resources to target a wider range of national and EC institutions.The diffuse nature of national and European industry federations often makesdifficult the establishment of a common EC industry viewpoint at anythingless than the lowest common denominator.

From an institutional point of view, the European Commission relies onindustry to provide the main source of information on infringement ofintellectual property rights in particular countries. The Commission takeson board industry views both on an ad hoc basis and through consultativemeetings with representatives of the business community. In July 1998, forinstance, the Commission met with representatives of European corporateactors to hear their concerns about TRIPs enforcement problems, the built-in agenda of TRIPs provisions where progress is envisaged by the TRIPsCouncil, and intellectual property issues that business considers necessary


for inclusion in any future WTO round of trade negotiations. Mostimportantly, the European Commission has been receptive to pharmaceuticalindustry views in its decision to enter complaints and engage in DisputeSettlement Procedures against both India and Canada. These disputes arediscussed later in the chapter.

Information provided by EC businesses operating in foreign markets isaugmented by reports on legislative and administrative arrangementsprovided by the Commission delegations in these countries but, as regardsthe actual situation on the ground, it is business that provides the main sourceof information on which the Commission formulates its perspectives on theshortcomings of national arrangements to implement the TRIPs Agreement.These perspectives are compiled as a database by the Directorate Generalfor External Affairs of the European Commission and offer EC policy-makersan important source of information about TRIPs implementation standardselsewhere in the world.

The view of European Commission officials is that the perspective ofindustry and government in the European Communities differs from that inthe United States. Global corporate actors based in the United States are, inthe view of the European Commission, less comfortable than their Europeancounterparts with national laws in other jurisdictions that substantially differfrom their own. Because the nature of the European integration process overthe past fifty years has so fundamentally dealt with adapting to andassimilating legal instruments derived from supranational institutions, bothgovernment and business in the European Communities have greaterexperience of accommodating the diversity in public policy that theyencounter in different markets. This is an important cultural differencebetween business and government attitudes towards the TRIPs Agreementin the European Communities and their counterparts in the United States.It is a difference of perspective on the role and significance of transnationallegal instruments that informs attitudes towards the TRIPs Agreement andforms a key distinction between perspectives on enforcement of the TRIPsAgreement on either side of the Atlantic. Put simply, there is greaterexperience of adapting to changing legal environments in the EuropeanCommunities than exists among their counterparts in business andgovernment in the United States. As a result of this difference, the potentialfor a divergence of views and fragmentation of the transatlantic consensusachieved between the United States and European Communities during theUruguay Round negotiations now hangs over the process of implementingthe Agreement.

Policy-makers in the European Communities have identified two sets ofissues that are likely to lead to problems in the enforcement of the TRIPsAgreement. First, they predict arguments that national implementinglegislation does not follow the spirit of the TRIPs Agreement and, second,they predict that US business in particular will not be satisfied with measurestaken in other countries to implement the TRIPs Agreement. The latter is


likely to prove particularly problematic if it is an accurate reflection of USbusiness attitudes towards enforcement, the prediction itself being based onthe presumption that US firms are less used to operating in foreignjurisdictions than their EC counterparts, and want to have conditions moreclosely resembling their own domestic legislation.

More worrying still for the future of the US–EC Uruguay Round consensuson intellectual property protection are concerns expressed by elements inthe European business community that US industry will try to ensure notonly that there is a level playing field for international intellectual propertylaw, but that intellectual property standards in other countries will be onterms favourable to global corporate actors based in the United States. Thisis not necessarily a means for US firms to gain competitive advantage, butrather an expectation on the part of US business that they themselves mustbe given the appropriate legal environment in which to enforce corporateintellectual property rights in accordance with national administrative andjudicial procedures. The role of the Business Software Alliance (BSA), forexample, has been identified as a significant factor in mobilising USgovernment officials to enter into the consultations with Sweden concerningthe latter’s failure to fulfil obligations under the TRIPs Agreement (the UScomplaint against Sweden is discussed in greater detail later in this chapter).

In comparison with the relatively proactive approach taken by US businessin ensuring that national implementing measures in other countries createa receptive legal environment for future local enforcement actions by thecompanies themselves, European business has generally been less wellinformed on the significance of issues raised during the TRIPs Agreementimplementation process. The reason for the relatively low profile of ECbusiness in ensuring that acceptable measures have been put in place bycountries implementing the TRIPs Agreement is a purely practical one: thereare simply fewer experts on the TRIPs Agreement in Europe than there arein the United States and furthermore, from a business perspective, there arefewer qualified patent attorneys in Europe, generally earning smaller salariesthan their US counterparts. This imbalance between the United States andEurope is turned on its head when one looks at public sector expertise andresources. The European Commission, augmented on the TRIPs Council bynational representatives of the fifteen EC Member States, provides the mostactive delegation in Geneva. The Office of the United States TradeRepresentative, on the other hand, has few resources by comparison and sohas little choice but to rely on US business advice and expertise to provideinformation that is used as the main basis of Special 301 decisions andcomplaints made to the WTO. Since the fifteen Member States in practiceoperate through an arrangement of ‘joint competence’ with the EuropeanCommunities on WTO matters (a legal principle discussed later in thischapter), national delegations adopt a strategy of allowing the EuropeanCommunities to take the lead in the TRIPs Council and, in this respect, theEuropean Commission representative to the TRIPs Council speaks on behalf


of all fifteen Member States, who will normally have adopted a commonposition and coordinated their response prior to the TRIPs Council meeting.This arrangement has profound implications for the ways in which corporateactors in Europe seek to influence public policy decisions on implementationof the TRIPs Agreement.

For corporate actors, the need to approach national officials who, in turn,seek to influence EC policy decisions, creates an additional level of complexity.In the United Kingdom, for instance, the role of the European Commissionin the scrutiny process is underwritten at a national level by the Patent Office,an agency of the UK government. The UK delegation to the TRIPs Councilis provided by the Patent Office, which takes account of the views of UKbusiness via the Standing Committee on Industrial Property (SACIP). SACIPcomprises seventeen representatives of the legal profession, industry andconsumer groups, intellectual property interests and academia,10 with a largernumber of associate members also representing industry views. The mainadvantage of SACIP is that its representatives from the business communityprovide the UK delegation to the TRIPs Council with practical knowledge oflocal market and legal conditions in other countries that can then be used todemonstrate the extent of inadequacies in intellectual property protectionexperienced by UK firms operating abroad. From a UK governmentperspective, SACIP also plays an important role because information providedby industry is then used: first, to brief senior government ministers embarkingon overseas trade delegations so that concerns about intellectual propertyrights can be raised with the appropriate foreign officials; second, to exertpressure through UK trade missions in countries about which concerns havebeen raised; third, so issues can be raised through international forums suchas the TRIPs Council; and, fourth, so that bilateral contacts can be madebetween lower officials within the respective governments with a view toresolving potential problems as early as possible.

But for UK business, although the Patent Office is generally thought of asbeing sympathetic to industry and despite the potential benefits of therelationship between a formal standing committee such as SACIP andrepresentations made to the TRIPs Council by the Patent Officerepresentatives on behalf of UK business, two problems with the currentsystem have been identified by corporate actors. First, the reliance on aformalised standing committee structure as a mechanism for receiving theviews of industry is in some cases thought to be unnecessarily inflexible bythe companies in the very industries whose concerns it is designed to hear.This inflexibility is seen as particularly noticeable in comparison to thesomewhat greater flexibility offered in the United States, where leadingcompanies are able to make a direct input into the work of the USTR, oftensimply by making a telephone call directly to the appropriate USTR official.Second, several respondents interviewed for this book expressed the viewthat SACIP exists primarily as a route for the Patent Office to collectcomments on policy proposals that it itself initiates, rather that being


responsive to the views generated by UK companies. Rather than rely onSACIP and Patent Office influence, large UK companies often prefer insteadto make their views known directly to the EC delegation to the TRIPs Councilvia their European-level trade associations, such as the European Federationof Pharmaceutical Industry Associations (EFPIA). In industries with a globalreach, such as the proprietary pharmaceutical sector, it is even common forbusinesses to bypass the European-level representation provided by anorganisation such as EFPIA,11 the European Communities and the MemberState delegations to the TRIPs Council altogether, going instead directly tothe USTR via global networks such as the grouping of the heads of patentoffices of the worldwide proprietary pharmaceutical companies, Interpat.

Although Interpat has rarely been afforded the attention that it deserves,its role is of great significance. Originally set up in the early 1970s, Interpathas operated without a permanent secretariat. Instead, it functions througha series of working groups, each chaired by a senior patent official from oneof the participating companies. In this way, Interpat is run by and on behalfof the heads of patent departments of the leading proprietary pharmaceuticalcompanies12 worldwide as a single-issue organisation unsullied by the workloadoften associated with the need to take on board a wider range of corporateissues outside the direct sphere of patent protection. Interpat’s sole purposeis to provide ‘an international forum for fostering improvements in intellectualproperty law with respect to pharmaceuticals’ (Gorlin 1999: 1). Althoughrarely publicised, in the post-Uruguay Round era, it is Interpat that hasundertaken much of the crucial scrutiny and surveillance work on behalf ofthe global proprietary pharmaceutical industry. Since the global proprietarypharmaceutical industry is largely US-based, numerically the main influenceon Interpat comes from US companies.13 The role of Interpat (and othergroups representing business interests) in initiating complaints made throughthe WTO Dispute Settlement Procedure is discussed below.

Dispute Settlement Procedure

Although WTO Members have encountered relatively few difficulties inimplementing the TRIPs Agreement in relation to the legislative measuresnecessary to undergo scrutiny by the TRIPs Council, problems have arisen inrelation to putting those measures into practice (see also Dreier 1996: 271),that is to say the achievement of ‘performance requirements’ (Otten andWager 1996: 403) in relation to the workings of procedures and remediesrequired by the TRIPs Agreement and set out in national law. It is in thisrespect that ‘enforcing the enforcement procedures of the TRIPs Agreement’(Reichman 1997: 276) through the Dispute Settlement Procedures of theWTO becomes so important. It is widely considered a positive feature of theUruguay Round of GATT that a considerably strengthened version of theearlier Dispute Settlement Procedure emerged from the negotiations (seeCooper Dreyfus and Lowenfeld 1997: 268). With the exception of the


requirement for notification and scrutiny under Article 63, the TRIPsAgreement does not contain explicit provisions in relation to the settlementof disputes. Instead, Article 64.1 refers disputes under the TRIPs Agreementto general WTO provisions as set out in the Understanding on Rules andProcedures Governing the Settlement of Disputes (DSU) of 15 April 1994.14

One of the acknowledged strengths of the Dispute Settlement Procedureis that it encourages bilateral ‘out of court’ settlement of disputes (Otten1998: 527). The DSU procedures begin with mutual consultation and attemptsto achieve conciliation (see also Dörmer 2000: 5). If a dispute cannot beresolved through consultations, the complainant Member may then requestthat the Dispute Settlement Body (DSB) establish a Panel to resolve thedispute (see also Lee and von Lewinski 1996). The WTO Dispute SettlementProcedure allows for the creation of three- or five-person Dispute SettlementPanels, comprising trade experts, to reach decisions on whether a Memberhas violated the TRIPs Agreement in terms of measures taken to enforce theintellectual property protection. The Panel Procedure benefits from thebinding and automatic nature of Panel findings, with a speedy resolutionensured by the requirement that the Panel make its report within six months.Dispute Settlement Panel Decisions can be appealed, on matters of law butnot fact, to a standing seven-member Appellate Body. Decisions of a Panel orAppellate Body are binding unless every Member, including the complainant,agrees to reject them, a process known as ‘reverse consensus’ (see also Dörmer2000: 6), which turns on its head past GATT practice by eliminating the defacto veto that existed under the pre-1994 Dispute Settlement Procedure (seealso Weissman 1996: 1095). A Member that is found by a Panel or AppellateBody to be in contravention of the TRIPs Agreement must revise its nationalprovisions to bring them in line with the Panel’s interpretation. If therecommendations of the Panel are not implemented within a reasonable timelimit, the WTO Dispute Settlement Body may authorise the complainantMember to suspend trade concessions or other WTO obligations to theMember that has been found to be in breach (see also Grubb 1999: 39).

The effectiveness of the Dispute Settlement Procedure is enhanced byprovision for an aggrieved Member to withdraw from the offending Memberconcessions in the same area of trade or, if this is not practicable or effective,in another trade area (see also Grubb 1999: 39; Otten and Wager 1999: 412).From the perspective of developing countries, however, this threat of ‘cross-sectoral retaliation’ (Weissman 1996: 1095) is of great concern. When aDispute Settlement Panel finds in favour of the complainant, that Memberand any third parties to the dispute can impose trade sanctions across a rangeof economic sectors, regardless of the sector in which the original infringementof the TRIPs Agreement had occurred. In much the same way as Special 301has proved so successful as coercing countries to amend their intellectualproperty law in bilateral relations between the United States and its tradingpartners, the WTO Dispute Settlement Procedure now holds out the prospectof trade sanctions with equivalence in terms of cross-sectoral scope being


linked to enforcement of the TRIPs Agreement. Sanctions are intended,however, to be very much a last resort (according to Otten and Wager 1999:412) and thus far the mere threat has, in many instances, been sufficient toelicit improvements to national intellectual property law.

Global corporate actors and the DisputeSettlement Procedure

Having recourse to the Dispute Settlement Procedure of the WTO as a meansto ensure effective implementation of the TRIPs Agreement has considerablebenefits. However, from the perspective of business, the Dispute SettlementProcedures have the drawback that if a company or individual is aggrievedbecause of a failure to enforce the TRIPs Agreement in a particular foreignmarket, that company does not have locus standi, namely a right to bring anaction before the WTO. Although it is corporate intellectual property rightsthat are likely to be infringed if inadequate national intellectual propertyarrangements are in place, disputes are ‘mediated’ at the WTO through ‘theagency of inter-governmental diplomacy’ (May 2000: 72). Crucially, to havetheir complaints heard before the WTO, corporate actors face the constraintthat they must petition their own national governments, as Members of theWTO, to bring an action through the Dispute Settlement Procedure on theirbehalf (see also Bello 1997: 357; Grubb 1999: 39; Macdonald-Brown and Ferera1998: 70).

The implication of excluding a private right of action under the TRIPsAgreement is that decisions on whether to proceed with complaints underthe Dispute Settlement Procedure will ultimately be made not by globalcorporate actors but by government officials, such as the USTR in the UnitedStates. In the European Communities, the situation is further complicatedby the need for the European Commission to achieve a consensus among allfifteen Member States before pursuing a complaint against another WTOMember. The practical effect of this arrangement is that, whereas in theUnited States businesses must petition the US government and convince theUSTR that it should take up a complaint on its behalf, in the EuropeanCommunities the obstacles to be overcome by businesses are multiplied bythe need to petition the EC Member States individually in addition toconvincing the European Commission of the seriousness of its complaint.Where a complaint is brought by one Member State against another, theCommission will mediate and seek resolution of the dispute, in effectcoordinating TRIPs compliance throughout the European Communities.Where the complaint is brought by an EC Member State against a thirdcountry (i.e. a non-EC country), the principle of joint competence that existsbetween the European Communities and its Member States comes into play.

Joint competence was established as a legal principle by the EuropeanCourt of Justice in its Opinion 1/94 of 15 November 1994.15 In that Opinionthe Court affirmed the exclusive competence of the Community for the


conclusion of the TRIPs Agreement as regards the border measures containedin Section 4 of Part III of TRIPs, namely those provisions concerning theprohibition of the release for free circulation of counterfeit goods to bedetermined by the customs authorities at the European Communities’external borders. The Court’s Opinion affirmed that this issue is to beconsidered part of the joint trade policy within the meaning of Article 113 ofthe EC Treaty.16 Despite the claim by the Commission that it was exclusivelycompetent in other aspects of the TRIPs Agreement, the Court did notrecognise exclusive EC competence beyond this single issue. But neither didthe Court accept the argument of Member States that enforcement of theTRIPs Agreement fell within the exclusive competence of individual MemberStates. Instead, the Court chose to develop the notion of joint competence,divided between the Community and the Member States, for enforcement ofthe TRIPs Agreement beyond the issue of controls at EC external borders.

In practice, joint competence translates into a practical requirement thateach party in the EC works on the basis of consensus decision-making. Toachieve consensus, regular meetings are held between the Commission andMember State representatives in Brussels, augmented by formal meetingshosted by the EC permanent representation to the WTO in Geneva. On thebasis of this consensus-building exercise, it is the Commission that takes thelead in the TRIPs Council on behalf of the Member States, utilising itsmandate from the Member States to speak with a voice for all fifteen ECcountries and, during the Article 63.2 TRIPs notification proceedings,coordinating the responses of all EC Member States so that particularcountries are not isolated from the positions taken by other EC MemberStates.

The Article 113 procedure, in principle at least, offers a mechanism fortrade sanctions to be imposed upon recalcitrant trading partners in muchthe same way as Special 301 has operated in the United States. Within theArticle 113 Committee, EC Member States have a procedural right to askthe Commission to investigate allegations of inadequate intellectual propertyprotection in non-Member States by virtue of the EC Trade BarriersRegulation 2641/84.17 The Commission must then make a decision whetheror not there are sufficient grounds for identifying a violation of theRegulation.18 If such grounds can be identified, a procedural right isestablished as to action that can be taken against that country, normally inthe form of the suspension of trade privileges with the EuropeanCommunities.

But there are inherent problems in the Article 113 system derived fromthe fact that unanimity among the fifteen Member States is required beforethe Committee can decide to take action in the form of trade sanctions againsta country deemed to provide inadequate protection of intellectual propertyrights. The political reality of requiring unanimity before action can be takenby the Article 113 Committee is that at any given moment it is likely that atleast one Member State will be engaged in a crucial stage of bilateral political


dialogue with, or a diplomatic visit to, a country that will lead it to step backfrom supporting the sanctioning of action by the Article 113 Committee. Inorder to bypass this institutional constraint, in reality, rather than engage inthe Article 113 procedure, it is more common for representatives of thebusiness community in the European Communities to come to theCommission on an informal basis with evidence of the adverse marketconditions in a particular country. The Commission will then seek to exertpressure on that country to reform its national provision by diplomatic means,without recourse to the Trade Barriers Regulation.

In the United States the formal route for corporate actors to influencegovernment on TRIPs implementation is via the network of eighteen IndustrySpecific Advisory Committees (ISACs) and the Industry Functional AdvisoryCommittee (IFAC). In practice, however, US business perceives the informalroute as being the more effective means of achieving its objectives vis-à-visthe USTR. In the vast majority of cases, where the priorities of the USTRare ‘congruent’ (Ryan 1998: 87) with those of groups representing US industry,‘public–private cooperation’ (Bello 1997: 357) characterises the relationshipbetween business and government in the United States.

This relationship is symbiotic: the absence of any private right of corporateactors to be heard as parties in complaints raised under the WTO DisputeSettlement Procedure ensures that business interests rely on governmentsponsorship of their cause while, conversely, corporate actors play a key rolein providing information and advice on implementation and enforcement ofthe TRIPs Agreement in the territories of other WTO Members to an under-resourced and over-stretched USTR. Companies with global interestscontinually feed information to organisations such as the IIPA and IPC aboutintellectual property infringements in foreign markets (see also Braithwaiteand Drahos 2000: 87), which in turn present recommendations to the USTR.The USTR then undertakes an inter-agency review of the issues (see alsoBello 1997: 357). Complaints raised by business interests are then articulatedby the USTR through the Special 301 process, TRIPs Council scrutinyprocedures and through the WTO Dispute Settlement Procedure. The roleof corporate actors and their representative business groups in monitoringimplementation of TRIPs provisions – and alerting the USTR as to the needto consider both Special 301 measures and complaints under the WTODispute Settlement Procedure against recalcitrant states – is therefore crucialto the whole implementation process.19

In the wake of their role in the formulation of the TRIPs Agreement, it isthe single-issue groups representing corporate intellectual property interests,particularly the IPC and the IIPA, that have now re-invented themselves asguardians of TRIPs implementation. Despite the decision of some companiesnot to remain members of the IPC once the core objectives of securing theTRIPs Agreement had been achieved on the basis that this no longerrepresents good value for money,20 the redefinition of the roles played by thesingle-issue groups has proved generally successful in maintaining the


momentum of membership involvement and the USTR still values the workof these single-issue interest groups.21 In addition to the IPC and IIPA, whichprovide representation for the US patent and copyright industries respectively,the International Trademark Association (INTA) operates a ‘TRIPs 2000Subcommittee’. The INTA Subcommittee has, for example, produced adetailed assessment of the level of compliance with the TRIPs Agreement inover sixty countries (International Trade Association 1999), finding thatenforcement remains problematic in many developing countries.

It is through their networks of local branches, agents and representativesworldwide that business interests represented by organisations such as theIPC, IIPA and INTA provide the USTR with a detailed accurate picture ofintellectual property standards in their respective markets. Copyright-reliantindustries such as the phonographic and video movie industries representedby the IIPA, in which the cost of reproducing high-quality pirated copies isrelatively low, have been particularly ‘aggressive’ (Ryan 1998: 155) in enforcingtheir intellectual property rights through global networks of surveillance,public awareness campaigns and pressure exerted on the governments ofrecalcitrant WTO Members and via complaints to the USTR, with theassociated threat of Special 301 actions.

Furthermore, once WTO Member countries have put in place the requiredmeasures to ensure effective enforcement, the ‘unstated inference’ (Reichman1996: 369) is that private domestic enforcement actions, brought by rightsholders under domestic law, will augment the top-down role of the TRIPsCouncil and reduce the need for Dispute Settlement actions. Civil litigationbrought by businesses operating in local markets has the potential to assistin ensuring effective enforcement of intellectual property protection. Yetdoubts remain whether this system will work effectively in practice giventhat, in the majority of countries, intellectual property actions are dealt withby non-specialist district courts that are often alleged to be unsympatheticto foreign owners of intellectual property rights (see Waters 1996: 767).

Global corporate actors, particularly proprietary pharmaceuticalmanufacturers, also operate an effective network of global surveillancethrough ongoing relationships with local firms of patent attorneys. It is theselocal agents who are well placed to provide multinational companies withinformation about changes to domestic law. However, the value of thisinformation resource should not be overstated. Information provided by localagents is of variable quality and it is often the case that the patent attorneyswho are best placed to know about changes to domestic intellectual propertylaw are those attached to large legal firms that conduct general litigationwork as opposed to those which concentrate simply upon patent applicationprocedures locally.

Global surveillance of copyright infringement suffered by US owners iscoordinated by the IIPA, which submits a detailed annual report on copyrightinfringement and piracy worldwide to the USTR by way of backgroundinformation and recommendations prior to the USTR’s decisions on initiating


the Special 301 procedure or complaints to the WTO Dispute SettlementBody. As it did in the pre-TRIPs international legal landscape, the IIPAcontinues to highlight piracy losses on both a regional and a global basis,emphasising industry variations and the economic impact of losses (see, forexample, IIPA 1998; Smith 1996: 559). The IIPA is assisted in the preparationof its reports by a network of US trade associations whose member companies,operating through branches, subsidiaries and agents in local markets, arethe actors best placed to provide an accurate (if unverified) account of localtrading conditions and intellectual property infringements. The motionpicture, music, book and software industries are particularly active in thisrespect (see also Ryan 1998: 71). The IIPA collates information it receivesfrom its member trade associations and undertakes lobbying activities ontheir behalf with the aid of estimates of losses to US industry abroad. In 1998the IIPA estimated that losses to the US economy in the previous year as aresult of copyright infringement amounted to almost $10.8 billion,22 of whichthe motion picture industry estimated losses of $1,584 million; the soundrecordings and music industry $1,321.8 million; computer programs andbusiness applications $3,964.4 million; games and entertainment software$3,249.2 million; and book publishing $664.1 million.23

A similar report is prepared annually by the PhRMA, which each yearproduces a country-by-country assessment for the USTR detailing intellectualproperty infringement abroad that is likely to lead to losses to the USproprietary pharmaceutical industry.24 In 1998, for example, the PhRMAestimated that annual losses in Argentina and India due to the absence ofpatent protection for pharmaceutical products amounted to approximately$500 million in each country.25

On receipt of complaints relating to intellectual property infringement,the role that the USTR engages in to manage its relations with corporateactors is very much that of an institutional ‘gatekeeper’ (Bello 1997: 359). Asin the case of the European Communities, US policy-makers are oftenconstrained by wider issues of political diplomacy when considering whetherto act on complaints by private business interests regarding TRIPs Agreementimplementation problems. Judith Bello, for instance (who served as GeneralCounsel and Deputy General Counsel at the USTR between 1985 and 1989)has acknowledged that security issues and foreign policy matters may wellinfluence the US administration’s decision on whether or not to bring acomplaint against another WTO Member under the Dispute SettlementProcedure (Bello 1997: 357). The significance of international politics indetermining whether or not WTO Members will be the subject of UScomplaints under the Dispute Settlement Procedure was corroborated duringthe research for this book.

US business representatives complained that US policy towards developingcountries on compliance with the TRIPs Agreement is ‘blunted’ by the factthat the USTR is not the only agency in the US administration with an interestin, for example, South America and South Africa. The USTR has been slow


to take action against Argentina26 for inadequate patent protection ofpharmaceutical products and against South Africa for measures allowingparallel imports. This reluctance to act on the part of the USTR has beenattributed to the wider diplomatic significance of a US strategic ally in SouthAmerica (in the case of Argentina) and the rebuilding of political institutionsin South Africa following the ending of apartheid. Turkey is also described asbeing ‘untouchable’ by US business interests, because its value as a memberof NATO far outweighs the inadequacy of measures taken to achieve effectiveintellectual property protection.

Within the Federal government administration, the formal mechanismfor coordinating intellectual policy is a subcommittee of the Trade PolicyStaff Committee (TPSC). This is chaired by the Director of IntellectualProperty at the USTR and comprises representatives of the Treasury,Commerce, State and Labor Departments. In theory, tensions betweencompeting departmental interests in relation to intellectual propertyprotection are dealt with by the TPSC, the Trade Policy Review Group(TPRG), chaired by the Deputy USTR, or by the National Economic Council.However, the frustration of US business representatives is that, in practice,the USTR is perceived to be a relatively weak institutional actor in comparisonwith the State Department and the Defense Department, lacking the politicalconstituency to limit the intervention of other parts of the administration ontrade issues. The overall result of this complex web of security issues,diplomatic imperatives and inter-departmental priorities is that the decisionnot to act on the basis of complaints from business relating to infringementof intellectual property rights will, on occasion, win out over US corporateinterests.

If the US administration does agree to bring a case before the WTODispute Settlement Procedure, corporate interests and the USTR-led inter-agency government team (Bello 1997: 357) then cooperate closely in draftingthe request for consultations with the WTO Member in question and, if thoseinformal consultations do not adequately rectify the problem, in theformulation of the complaint made by the US delegation to the WTO atmeetings of the Dispute Settlement Body. In practice, although the USTRwill take the lead in representing the United States before a Panel in theWTO Dispute Settlement Procedure, it will do so only after closely consultingwith corporate interests at home, who in turn have generated the originalcomplaint and are well placed to provide technical expertise and specialistknowledge throughout the course of the WTO Dispute Settlement Panel’sdeliberations (see also Bello 1997: 361).

Although few disputes have so far been initiated in relation to the TRIPsAgreement, with only four Panels so far concluding their deliberations ininstances of complaints relating to non-compliance with Agreementobligations, the significance of the dispute settlement mechanism as a meansof ensuring that Members provide effective enforcement is already clear. Itoffers a far more effective mechanism than that available under the previous


GATT 1947 provisions (see Gutowski 1999: 743). The remainder of thischapter examines WTO disputes relating to the TRIPs Agreement andindicates the significant role played by global corporate actors in initiatingand contributing to the outcome of these activities.

Copyright protection of sound recordings

The first WTO dispute specifically27 arising from an alleged failure toimplement provisions of the TRIPs Agreement was the US complaintof 9 February 1996 that Japanese copyright law did not comply with therequirements of Article 14 of the TRIPs Agreement in respect of protectionof sound recordings.28 The music recording industry, represented by theInternational Federation of Phonographic Industries (IFPI) and the RecordingIndustry Association of America (RIAA), was at the forefront of complaintsthat, as Japan only provided retroactive copyright protection for soundrecordings since copyright law was amended in 1971, it had failed to meet itsobligations under Article 18 of the Berne Convention, as adopted in Article14.6 of the TRIPs Agreement.

Through the IFPI and RIAA, the global music recording industry was ableto put its case to the US Trade Representative. However, the industry alsoadopted a dual strategy of putting its case to US and EC policy-makersconcurrently, with equivalent complaints being raised by the IFPI in Europe.As a result, on 6 May 1996 the European Communities and their MemberStates also requested consultations with Japan.29 In the light of consultations,the Japanese government indicated that it was willing to amend its copyrightlaw to provide for protection of sound recordings for the full term of fiftyyears, as provided for in the TRIPs Agreement (see also Geuze and Wager1999: 376; Giust 1997: 91) and, on 24 January 1997, the United States andJapan informed the Dispute Settlement Body of the WTO that they hadreached a mutually acceptable solution to the dispute.30 On 7 November 1997the European Communities and Japan also notified a mutually agreed resultto the consultations.31 Japan notified the TRIPs Council of the appropriateamendments to its copyright law on 25 August 1997.32 The resolution of thisdispute has, in some respects, been seen as setting the pattern of using theWTO Dispute Settlement Procedure as the mechanism to resolve intellectualproperty disputes in preference to unilateral trade sanctions of the typepreviously resolved via the US Special 301 mechanism (Vaver 2000: 9). Italso demonstrates that global corporate actors, in this case the music industry,were prepared to adopt a dual strategy, initiating complaints to the WTO byboth the United States and the European Communities as a means of exertingmaximum pressure on a recalcitrant Member.


Mailbox protection for pharmaceutical and agriculturalchemical products

The dual strategy of linked US and EC complaints was also utilised to ensuremailbox protection for pharmaceutical and agricultural chemical productsin India. It will be recalled from the description of the TRIPs Agreementgiven in Chapter 3 that, under transitional arrangements for developing andleast-developed countries, arrangements are set out in Article 70.8 of theTRIPs Agreement which oblige WTO Members to establish a system for filingpatent applications on pharmaceutical and agricultural products (the so-called‘mailbox protection’ provisions), while Article 70.9 requires Member countriesto set up a system to grant exclusive marketing rights to such patent applicantsif they meet certain criteria.33

Mailbox protection under the TRIPs Agreement implies that a WTOMember that chooses to avail itself of the extended transitional arrangementsfor developing and least-developed countries, and which does not currentlyoffer product patent protection for pharmaceutical products, must set up amechanism by which to accept patent applications for inventions made afterthe TRIPs Agreement came into force. These applications will sit unprocessedin a ‘mailbox’ until that country ends its transitional arrangement andbecomes fully TRIPs-compliant. Products subject to mailbox patent protectionare also subject to exclusive marketing rights for a maximum of five years ifthe product comes onto the market before the patent law comes into effect.34

Despite the ten-year transitional period for developing countries to conformto TRIPs Agreement requirements for mailbox protection, in order to allowfor the filing of pharmaceutical patent applications these measures wererequired to be in place immediately. Problems, however, arose in Pakistanand India, where no such provisions had existed prior to the TRIPs Agreement.

In the case of Pakistan, on 30 April 1996 the United States, acting on acomplaint from the PhRMA, requested consultations under Article 4 of theDispute Settlement Understanding and Article 64 of the TRIPs Agreement,alleging that Pakistan had failed to meet its obligations under Articles 70.8and 70.9 of the TRIPs Agreement, namely a requirement to establish systemsthat conform to Articles 27, 65 and 70.35 Faced with the threat of a WTODispute Settlement Panel, Pakistan and the United States entered intoconsultations that ultimately led to the introduction of the appropriateprovisions in Pakistan without the need to actually institute formalproceedings (see also Gutowski 1999: 739). The issue was resolved whenPakistan notified the TRIPs Council36 that it had introduced implementinglegislation which retroactively validated mailbox applications from 1 January1995 (see also Geuze and Wager 1999: 378; Grubb 1999: 42). Pakistanintroduced the appropriate legislative provisions before formal proceedingsbefore a WTO Dispute Settlement Body Panel were initiated.

In India’s case, the United States (again responding to the PhRMA’sarticulation of US-based proprietary pharmaceutical manufacturers’concerns) complained to the WTO on 2 July 1996, alleging an infringement


of Articles 70.8 and 70.9 of the TRIPs Agreement, requiring the patentprotection of pharmaceutical and agricultural chemical products, and thegranting of exclusive marketing rights for these products under Article 70.9(see also Macdonald-Brown and Ferera 1998: 69). The United States waslater joined in its complaint by the European Communities, which, followingthe intervention of EFPIA on behalf of the European pharmaceutical industry,lent support to the United States’ complaint and asked the Panel to find thatIndia, not having carried out its obligations under Articles 70.8 and 70.9 ofthe TRIPs Agreement, should bring its domestic law into conformity withthese obligations.

The complaint arose because India had ratified the WTO Agreements on31 December 1994 by governmental decree, without seeking the approval ofthe Indian Parliament, and simultaneously amended the Patent Ordinancein order to allow for mailbox applications. This Patent [Amendment]Ordinance 1994 subsequently lapsed because it had not been confirmed withinsix weeks of the re-assembly of the Indian Parliament, as required by theIndian Constitution. In practice, the Indian Patent Office continued to allowmailbox applications to be made, but without appropriate legislation to makereceipt of such applications a legal requirement. In spite of two failed attemptsby the Indian Parliament to re-introduce the Patent [Amendment] Ordinancein order to bring national law into line with the TRIPs Agreement, politicalinstability prevented its adoption by the Indian Parliament.

Meanwhile, between 1 January 1995 and 15 October 1997 a total of 1,924applications for pharmaceutical and agricultural products were submittedto the Indian Patent Office, of which 531 were from US companies.37 Theimplications of this situation were that, even though in practice the filing ofpatent applications was possible, from a global business perspective, in theabsence of seeing the appropriate legal provisions in place commercialcertainty was being undermined. Despite reassurances from the Indian PatentOffice that all mailbox applications were being dealt with appropriately, oneproprietary pharmaceutical company interviewed for this book reportedthat its applications were disappearing into a ‘black hole’, with noacknowledgement from the Indian Patent Office as to whether applicationshad even been accepted or not. This view was corroborated by Harvey E.Bale Jr, Senior Vice President of the PhRMA, who, in a letter to the USTRappended to the Panel’s Report,38 complained that PhRMA companies wereexperiencing great losses in India because of its failure to provide patentprotection for pharmaceutical products. But it was not only US companiesthat were members of the PhRMA. In preparation for the Dispute SettlementPanel, the worldwide proprietary pharmaceutical industry acted globally viaInterpat and established an India International Task Force, chaired by a seniorexecutive and patent expert based in the UK at GlaxoWellcome. The InterpatTask Force played an important role in coordinating information of theindustry losses in India that was then fed into the Dispute Settlement


Procedure to demonstrate definitively the level of losses being experiencedby global research-based pharmaceutical companies in India.

In response to evidence of losses provided by industry, the US complaintagainst India contended that India had failed to establish a suitable mailboxsystem for pharmaceutical and agricultural chemical product patents duringthe TRIPs Agreement transitional arrangements and that India had failedto establish a system of exclusive marketing rights by 1 January 1995 (seealso Macdonald-Brown and Ferera 1998: 69). India, on the other hand, arguedthat WTO Members were free to determine the means by which mailboxapplications were to be dealt with, and that it had initially decided to providefor such a means through administrative instructions to the Indian PatentOffice, to be followed later by a Bill of Parliament.

On 7 November 1996 the US requested that the DSB establish a Panel toexamine its complaints. The Panel was established on 20 November 1996and, in its Report concluded that, as it had not been persuaded that India’s‘administrative instructions’ would prevail over the contradictory mandatoryprovisions of the Patents Act, India had not adequately achieved the objectand purpose of Article 70.8 of the TRIPs Agreement and had not protectedthe legitimate expectations of inventors of pharmaceutical and agriculturalchemical products. The Panel Report39 and Appellate Body Report40 havebeen interpreted (see in particular Geuze and Wager 1999: 353) as meaningthat mailbox applications filed in India and handled by the Patent Officeunder its administrative instructions to accept them might be overruled byan Indian court, if that court took the view that the administrative instructionssetting up the mailbox system could not prevail over the contrary provisionsof the Indian Patent Act. Since the mailbox system related to patents forpharmaceutical products considered unpatentable under the Act, there waspotential for any patent granted under this system to be invalidated. ThePanel emphasised that there must be a sufficient degree of predictability tofulfil the ‘legitimate expectations’ of Members and therefore took the viewthat India did have an obligation to take legislative, rather than justadministrative, measures (see also Macdonald-Brown and Ferera 1998: 71).

With respect to Article 70.9 of the TRIPs Agreement, India did not disputethat its national authorities lacked the legal powers to grant exclusivemarketing rights, as required, but argued among its defences that, since noapplications for exclusive marketing rights had actually been received, theyhad therefore not refused any application for rights. The Panel rejected India’sarguments: what mattered was the existence of legislation that required theexecutive to act in a way that was consistent with the obligations under theTRIPs Agreement and, in the absence of such legislation, the legitimateexpectations of WTO Members could not be protected (see also Macdonald-Brown and Ferera 1998: 72). The Panel cited the evidence submitted byHarvey Bale on behalf of PhRMA to demonstrate unsuccessful attempts byEli Lilly Corporation to acquire information about obtaining exclusivemarketing rights in India.


The Panel concluded that the obligation under Article 70.9 to grantexclusive marketing rights was a legitimate expectation that had not beenfulfilled by India. The Panel therefore recommended that the WTO DisputeSettlement Body request that India bring its transitional arrangements inline with its obligations under the TRIPs Agreement. However, significantly,the Appellate Body reversed the Panel’s view that India had undermined the‘legitimate expectations’ of WTO Members. The Panel had found that the‘legitimate expectations’ test was mandated by prior GATT jurisprudence,including a number of Panel Reports laying down the principle of tradeprotecting the conditions of competition that flows from multilateral tradeagreements, supported by Article 31 of the Vienna Convention on the Law ofTreaties, which required a ‘good faith’ standard that indirectly protected‘legitimate expectations. The Appellate Body, although finding against Indiain relation to Articles 70.8 and 70.9, rejected this ‘legitimate expectations’test as being derived from GATT jurisprudence on non-violatory acts ofnullification or impairment, a type of action expressly suspended during thetransitional periods for developing countries allowed under the TRIPsAgreement (see Reichman 1998: 595). The Appellate Body also refused toendorse the Panel’s findings that India must eliminate any reasonable doubtsregarding whether mailbox applications and patents eventually based on themcould be rejected or invalidated because the matter for which protection wassought was unpatentable in the country in question at the filing or prioritydate.41 The consequences of the Appellate Body’s rejection of the ‘legitimateexpectations’ test are discussed further in Chapter 6.

The Indian Patents (Amendment) Ordinance was finally passed on8 January 1999 to amend the Patents Act to comply with the obligations ofArticles 70.8 and 70.9 of the TRIPs Agreement.42 Despite this progress,43 thematter may not be satisfactorily resolved as far as the proprietarypharmaceutical industry is concerned. In early 1999 the United Statesexpressed its concern that the Ordinance still failed to meet the standardsrequired by the TRIPs Agreement and called for discussions with Indianofficials at the earliest opportunity.44

The India mailbox dispute was the first intellectual property complaint togo through the entire WTO Dispute Settlement Procedure. As such, it hasbeen widely hailed as demonstrating a willingness on the part of the WTO totake swift action to ensure effective enforcement of the TRIPs Agreement(for excellent accounts of the Panel’s deliberations, see also Gutowski 1999:742; Henderson 1997: 657–60; Macdonald-Brown and Ferera 1998: 69). Whatthe mailbox dispute also demonstrates is the willingness of the globalpharmaceutical industry to organise its information-gathering expertisethrough Interpat, lobby effectively in the United States via PhRMA and inthe European Communities via EFPIA, and adopt a dual strategy ofencouraging a US complaint with third-party support from the EuropeanCommunities. In the subsequent Bolar exemptions/stockpiling complaintagainst Canada, that strategy was modified by the global pharmaceutical


industry to take account of domestic political circumstances in the UnitedStates. In that instance, the European Communities provided the mostappropriate venue for pharmaceutical industry complaints, as the followingsection demonstrates.

Bolar exemptions and stockpiling

There are instances in which it is expedient for the United States to allowthe European Communities to take the lead in WTO Dispute SettlementProceedings for political and diplomatic reasons. The Canada–EC dispute isa case in point. On 19 December 1997 the European Communities and itsMember States initiated a complaint against Canada concerning itsobligations under Articles 27.1, 28 and 33 of the TRIPs Agreement45 and theincompatibility of Sections 55.2(1) and 55.2(3) of the Canadian Patent Actwith the TRIPs Agreement. The lead taken by the European Communities,in preference to a complaint by the US, can be accounted for by the existenceof the so-called ‘Bolar exemption’. This provision of US law made it politicallyunacceptable in domestic terms for the US pharmaceutical industry to makea formal complaint about the stockpiling of pharmaceutical products inCanada and expect that complaint to be taken up by the USTR. The disputedprovisions of Canadian patent law in turn owed much of their origins topressure from a new set of corporate actors. Canadian generic drugmanufacturers such as Novafarm, which had been largely absent from thedebate about the content of the TRIPs Agreement during its formative stages,now saw the potential of direct benefits from replicating and expanding uponthe US Bolar provisions.

The Bolar provision is derived from the case of Roche v. Bolar,46 in whichBolar Pharmaceuticals Co. Inc. had been intending to introduce a genericversion of a Roche pharmaceutical product into the United States as soon asthe patent held on this product expired.47 Bolar carried out clinical testing ofits version of the product while the patent held by Roche was still in force.The US Federal Circuit Court held that the exception to patent infringementfor experimental use that had been allowed in earlier case law did not coverexperiments where there was a clear commercial goal, as opposed to purelyspeculative research which was patent protected. The US Congress lateroverruled the decision in Roche v. Bolar in the Drug Price Competition andPatent Term Restoration Act of 1984 (the so-called Hatch–Waxman Act),which specified that it was not an infringement of a patent to make, use orsell a patented invention solely for uses reasonably related to the developmentand submission of information under a Federal law which regulates themanufacture, use or sale of drugs (see also Evans 1994: 148; Grubb 1999:162). In the light the Hatch–Waxman Act, the Abbreviated New DrugApproval (ANDA) procedure allows generic companies to carry out testingat any time, regardless of patent protection on the original product, with


regulatory approval being granted for the generic version of the drug on theexpiration of the patent.

Following the Hatch–Waxman Act, generic drug manufacturers worldwidebegan to lobby other countries to introduce equivalent measures, with theimplication that they would locate manufacturing facilities in countries withregulatory arrangements that were sympathetic to the idea of ‘Bolarexemptions’.48 It was against this background that the US approach has beentaken a step further by Canada. The Canadian approach can be partlyexplained by the situation in that country before the TRIPs Agreement,whereby the influence of a large generic drug industry, led by companiessuch as Novafarm, was augmented by a long history of compulsory licenceswhich only allowed 4 per cent of royalties to be payable to the patentee(compared with 25–30 per cent for analogous provisions in the UK).

Canada sought to support domestic generic drug manufacturers byintroducing their own version of the Bolar exemption in Sections 55.2(1) and55.2(2) of the Canadian Patent Act. Section 55.2(1) permitted a third party,without the consent of the patent holder, to use a patented invention to carryout experiments and tests required (such as for proof of safety andbioequivalency) to obtain marketing approval of their copy of an innovativemedicine before the expiration of the relevant patent in order to ensuremarket access immediately following the patent expiry. Furthermore, Section55.2(2) of the Canadian Patent Act, used in conjunction with theManufacturing and Storage of Patented Medicines Regulations, permittedthe manufacture and stockpiling of patented products for a period of up tosix months before patent expiry for sale after expiry (see also Wilcox andD’Aguiar 2000: 11). Canadian law was therefore going even further than theUS Hatch–Waxman approach by allowing not only testing for regulatoryapproval while the patent was still in force but also the manufacture andstockpiling of the generic drug for release onto the market as soon as thepatent on the product had expired.

Given the politically sensitive issue of the Hatch–Waxman Act at home,United States proprietary pharmaceutical companies felt unable to take thelead in raising complaints about the compatibility of Section 55.2 of theCanadian Patent Act with the TRIPs Agreement by raising the issue withthe USTR. Instead, through the coordination mechanism offered to globalproprietary pharmaceutical companies by Interpat, US pharmaceuticalcompanies encouraged their European counterparts to take the lead by raisingthe issue with the European Commission, both as individual companies andvia EFPIA. As a result, on 19 December 1997 the EC complained thatCanadian legislation allowed for experimental use of patented inventions bya third party for the preparation of market access, without the consent of thepatent holder, immediately following expiry of the patent. The EuropeanCommunities also complained that provisions in Canadian law allowed formanufacturing and stockpiling of patent products for a period of up to sixmonths before patent expiry. The European Communities claimed that


Sections 55.2(1) and 55.2(2) of the Canadian Patent Act were not compatiblewith Article 28.1 of the TRIPs Agreement, which provides that a patent systemshall confer on its owner the exclusive right to prevent third parties not havingthe owner’s consent from, among others, the acts of making and using.Furthermore, the EC complained that, since the described provision aims atpharmaceutical inventions only, there also exists a violation of Article 27.1 ofthe TRIPs Agreement, which provides that patent rights shall be enjoyablewithout discrimination as to the field of technology and provides no basis fortreating pharmaceutical patents differently from other types of product.

However, the Dispute Settlement Panel agreed that Section 55.2(1) of thePatent Act (the regulatory review exception) did amount to a ‘limitedexception’ within the meaning of Article 30 of the TRIPs Agreement.49 Theexception for regulatory review under Section 55.2(1) was limited because ofits narrow scope, being confined to the requirements of the regulatory reviewprocess. Canada had also claimed that the United States had entered intonegotiations for the TRIPs Agreement with the intention of preserving theBolar exemption present in US domestic law and that the Canadian regulatoryreview exception under Section 55.2(1) amounted to an equivalent measure.The Panel rejected this argument on grounds that there was no materialevidence to support this interpretation of the United States negotiatingposition. Yet the reluctance of the United States to take the lead in thiscomplaint against Canada, preferring instead to rely on the EuropeanCommunities to bring a dispute settlement action, the successful resolutionof which, to a large part, would be of direct benefit to US pharmaceuticalcompanies who were faced with the threat of cheap generic drugs floodingthe lucrative US market if Canada’s regulatory review and stockpilingexceptions remained intact, lends some credence to this version of events. Inthe event, the complicity of the United States in negotiating a built-in ‘Bolarexemption’ for the TRIPs Agreement did not need to be proved for the Panelto accept that Section 55.1(2) of the Canadian Patent Act amounted to alimited exception to a patent holder’s rights under Article 30.

With respect to Section 55.2(2), although Canada acknowledged that itsdomestic law was not in accordance with Article 28.1 of the TRIPs Agreement,the conclusions of the WTO Panel focused on the application of Article 30.The Panel considered the requirements of Article 30 and found the stockpilingexception not to be ‘limited’ in the narrow sense envisaged by the TRIPsAgreement since the stockpiling provision had no limitations on the quantityof production during the final six months of patent term or the marketdestinations of such products (see also Wilcox and D’Aguiar 2000: 12). ThePanel therefore considered that stockpiling was a substantial curtailment ofthe patent holder’s rights contrary to Articles 28.1 and 30 of the TRIPsAgreement.

Finally, the EC claimed that the regulatory review exception under Section55.2(1) of the Patent Act was in breach of Canada’s obligations under Article27.1 of the TRIPs Agreement, since it discriminated on the basis of the field


of technology in focusing on the pharmaceutical industry. The Panel, however,failed to find evidence that the European Communities had shown either adiscriminatory effect or a discriminatory purpose to the regulatory reviewexception under Section 55.2(1).

As a result of its deliberations, on 20 March 2000 the WTO Panel’s Report50

concluded that Canada’s stockpiling exception under Section 55.2(2) of thePatent Act was inconsistent with obligations under the TRIPs Agreement,but that Canada’s provisions under Section 55.2(1) allowing regulatory reviewof generic products before the end of the term of protection for an equivalentpatent product were not inconsistent with its obligations under the TRIPsAgreement.

On 6 May 1999 the United States filed its own complaint against Canadain relation to term of patent protection.51 Steering clear of Section 55 of theCanadian Patent Act, which was the source of the Canada–EC dispute andwhich remained politically sensitive in the United States, the United Statesinstead complained that Section 45 of the Canada Patent Act was incompatiblewith Articles 33 and 70 of the TRIPs Agreement, which requires WTOMembers to provide patent term of at least twenty years from the date offiling of the patent application.52 From the point of view of the United States,Canada applied a term of protection that was in many cases shorter thantwenty years. The US complaint explicitly referred to the damage thismeasure was causing to the pharmaceutical industry and provided evidencefrom Pfizer Inc. to demonstrate that its anti-depressant drug Zoloft, for whichpatent protection had expired in August 1999 at the end of its seventeen-year term in Canada, should not, under the terms of the TRIPs Agreement,have expired.53

The background to the dispute lay in the fact that, before 1 October 1989,Canada provided patent protection for a term of seventeen years from thedate of grant of a patent. With effect from 1 October 1989, Canada changedthe Patent Act to provide patent protection for a term of twenty years fromthe date of filing of the application for a patent. No retroactive effect wasapplied to patents granted before that date. On 5 May 2000, the WTO Panel,54

in conclusions upheld on appeal,55 agreed with the US complaint that Section45 of the Canadian Patent Act was incompatible with Article 33 of the TRIPsAgreement (which specifies a minimum term of twenty years patentprotection) and reiterated that Article 70.2 of the Agreement furthermoreunderlines this requirement by specifying that no provisions exist for theintroduction of lower levels of protection than those set out in the Agreement.

The proprietary pharmaceutical industry again faced the possibility ofmeasures equivalent to Bolar and stockpiling provisions being introduced inIsrael. Once more, the dual strategy of the United States and EuropeanCommunities approach was used to exert pressure in favour of an acceptablelegislative framework for patent protection. In this instance, since thelegislation was still at the preparatory stage, US–EC intervention took theform of diplomatic representations. The origins of proposals to introduce


these measures in Israel can be found in the Tel Aviv District Court’s decisionin Eli Lilly v. Teva Pharmaceutical Industries Ltd.56 The generic drug industry inIsrael was faced with the uncompetitive regulatory environment in comparisonwith manufacturers based in other countries (particularly those in Canadaand the United States) that could enter into trials to improve on a patent orto obtain data for regulatory approval by virtue of Bolar exemptions. Withthe prospect of generic drug manufacturers, and Teva in particular, relocatingtheir operations outside Israel in order to gain access to trials before patentson pharmaceutical products expired, the Israeli government had originallyplanned to mirror Canadian provisions by allowing regulatory approval workand stockpiling of patented pharmaceutical products. This move was widelyseen by the global proprietary pharmaceutical industry as significantlybenefiting Israeli generic drug manufacturer Teva and, in opposition to theintroduction of stockpiling provisions in Israel, it was Interpat that led theproprietary pharmaceutical industry’s initiative, providing a global presenceto the pressure exerted on Israel not to introduce stockpiling provisions. On17 February 1998, after over three years of discussions with the United Statesand the European Communities, the Israeli Parliament (the Knesset) finallypassed an amendment to the Patent Law that allows generic companies toundertake trials necessary for filing a request for regulatory review before apharmaceutical patent has expired, but offsets this benefit to genericcompanies with an extension to patent term in the case of pharmaceuticalpatents (Cohen 1998: 24). The outcome should therefore be acceptable tocompanies represented by Interpat: the patent owner is protected in Israelilaw in the sense that generic companies cannot undertake stockpiling or anyother activity beyond obtaining regulatory approval while a pharmaceuticalproduct is still under patent protection.57

When a country considering introducing standards of intellectual propertyprotection falls within the sphere of influence of a particular developedcountry, global corporate actors have demonstrated that they are preparedto engage in forum shopping not only in relation to negotiating the TRIPsAgreement, as seen in earlier chapters, but also in securing appropriateimplementation. Forum shopping will occur when a particular developedcountry offers the best route for achieving the preferred outcome of globalcorporate actors. In relation to Cyprus, the global proprietary pharmaceuticalindustry expressed concerns in early 1998 about possible Bolar-typeexemptions and stockpiling measures in Cyprus. Given the strategicallyimportant location of Cyprus, close to the European mainland, providing apotential site for offshore generic manufacturers to produce and stockpilecopies of patented pharmaceutical products, the issue was taken up by theEuropean Communities. The European Commission, in consultation withrepresentatives of the proprietary pharmaceutical industry via EFPIA andPhRMA, made clear its views to the Cypriot government. By adopting astrategy of linking intellectual property to trade in relation to lucrativebilateral EC–Cyprus trade agreements and in the face of widely reported


concern that Cyprus’s EC candidacy and its reputation as a country consideredsafe for foreign business investment would be adversely affected,58 plans toallow stockpiling of patented products under the Cyprus (Patent) Bill weredropped.

Signs of fragmentation of the globalcorporate consensus

Despite a trend for global corporate actors seeking to overcome institutionaland political constraints by forming strategic alliances and engaging in adual strategy of US and EC complaints, or even forum shifting from the UnitedStates to the European Communities in relation to patent protection forpharmaceutical products, in the copyright sector, complaints raised by UScompanies in relation to standards of intellectual property protection in theEuropean Communities have marked a move away from the dual strategy ofglobal corporate actors utilising both US and EC routes to influence foreigngovernments. In the copyright sector it is European states that have foundthemselves falling foul of complaints by the United States. The cracks in theUruguay Round consensus between business and policy-makers in the UnitedStates and the European Communities became apparent as early as 1997,when the Business Software Alliance (BSA), which represents the interestsof the US computer software industry, played a significant role in mobilisingUS government officials to enter into the consultations with Swedenconcerning the latter’s failure to fulfil obligations under the TRIPsAgreement. The US complaint concerned Articles 50, 63 and 64 of the TRIPsAgreement, under which WTO Members are required to make available exparte provisions in civil proceedings. This requires national courts to imposeprovisional measures in order to prevent infringements and to preserveevidence (see Dörmer 2000: 24).

On 18 May 1997 the United States requested consultations with Sweden59

regarding the failure of anton piller60 orders under Swedish law to allowsufficient scope for premises to be searched without warning in order todetermine whether an infringement of intellectual property rights had takenplace.61 In response, on 25 November 1998 the Swedish Parliament adoptedlegislation that amended Swedish intellectual property law to allow a courtto grant an anton piller order to a search for evidence of infringement ifthere is reason to believe that an individual has or soon will infringeintellectual property rights (see also Geuze and Wager 1999: 381; Gutowski1999: 740). On 2 December 1998 this enabled the United States and Swedento notify the WTO Dispute Settlement Body that the issue had been resolved.

What is particularly notable about this case is that, in its objections toSwedish legislation implementing the TRIPs Agreement, it was the softwareindustry, through the BSA and the International Chamber of Commerce,that instigated the complaint. Although resolved without recourse to theformal WTO Dispute Settlement Procedure, this complaint was seen in the


European Communities as an attempt by US software companies to create alegal environment sympathetic to their interests, motivated by the desire toensure that users products licensed by their member companies were actuallypaying for software used through legitimate means in the face of the Europeantradition of guarding against abuses of anton piller orders by maintainingrestrictive provisions on their use.

Further evidence of the fragmentation of the US–EC consensus, at leastin relation to copyright protection, can be seen in relation to copyrightprotection for films and television broadcasts. Following a complaint fromthe MPAA, the United States requested consultations with Greece62 on 30April 1998, and made a parallel request for consultations with the EuropeanCommunities,63 claiming inadequate copyright protection for films andtelevision programmes broadcasts by TV companies in Greece (see Dörmer2000: 25).

Most recently, the European Communities complained that the UnitedStates had failed to meet its copyright obligations under the TRIPsAgreement. On 26 January 1999, the European Communities, later joinedas third parties by Australia, Brazil, Canada, Japan and Switzerland,complained to the Dispute Settlement Body that Section 110(5) of the UnitedStates Copyright Act, as amended by the Fairness in Music Licensing Act of27 October 1998, ran contrary to Article 13 of the TRIPs Agreement andtherefore was not consistent with the Berne Convention, as incorporatedinto the TRIPs Agreement by Article 9.1. The amended Section 110(5)contained an exception to the exclusive rights of copyright holders in instanceswhere copyrighted work was communicated to the public in commercialpremises on ‘homestyle’ audio-visual equipment (the type of receivingequipment commonly used in private homes). On 15 June 2000 the DisputeSettlement Panel upheld the main substantive elements of the complaint64

and, as a result, the United States was required to bring the ‘homestyle’provisions of its Copyright Act into conformity with its obligations under theTRIPs Agreement.

Assessment

Through their involvement in the TRIPs Council scrutiny process andcomplaints raised on their behalf by WTO Members through the DisputeSettlement Procedure, global corporate actors have demonstrated a high levelof activity designed to ensure effective implementation of the TRIPsAgreement. In this respect, the Agreement has not only allowed globalbusiness interests greater commercial certainty that intellectual propertyrights will be adequately protected, but has also provided a more ‘reliableand coherent’ (Worthy 1994: 198) international legal framework for securingeffective implementation and enforcement than had existed under the earlierWIPO-administered intellectual property conventions.

By participating in scrutiny and implementation work, corporate alliances


have come to the fore on a global scale. These global alliances both augment,and at times supersede, the predominance of earlier, regionally organised,corporate interest representation that characterised the pre-Uruguay Roundlandscape. In many respects, for business sectors such as proprietarypharmaceuticals, computer software, film and television, where companiesincreasingly face common problems globally in relation to TRIPsimplementation, the quest for common solutions via the TRIPs Agreementand through the redefinition of business interests on a global scale has beenseen as a logical and necessary step.

Following the end of the transitional period for developing countryimplementation of the TRIPs Agreement, attention now turns to concernsthat, despite introducing national legislation to ensure that domesticprovisions are compliant with TRIPs, developing countries may not in practicebe able to achieve the levels of effective enforcement that the developedcountries negotiating the TRIPs Agreement had foreseen. It is through theirnetworks of branches, subsidiaries and local agents that global corporateactors are well placed to monitor the effectiveness of national enforcementon the ground in developing countries. Furthermore, global business interestsremain mindful of the risks associated with WTO Dispute SettlementPanellists engaging in judicial activism, applying a more accommodating andless stringent standard of review to developing countries (see, for example,Bello 1997: 364). Such a degree of differential treatment runs contrary tothe principles underpinning the TRIPs Agreement itself. Given the limitedextent of Panel findings in relation to the fulfilment of TRIPs Agreementobligations so far decided, it remains to be seen how the WTO DisputeSettlement Body will respond. The relationship between global corporateactors and developing countries is considered in detail in the next chapter.

5 Impact of the TRIPsAgreement on developingcountries

Any future renegotiation of the TRIPs Agreement must to take into accountconcerns that the costs of complying with its provisions far outweigh thebenefits for developing countries. In examining these concerns, this chapterpays particular attention to predictions that the effects of the TRIPsAgreement on economic development and health care provision are likely tobe adverse, with domestic judicial and administrative arrangements unableto cope with the burden of enforcement. But there is also a need to balancepredictions of the costs of the TRIPs Agreement against estimates of thepotential benefits that may accrue to developing countries. Before looking atthe costs, the first section of the chapter examines the benefits of increasedforeign direct investment, transfer of technology, local innovation and theprotection afforded to developing countries by use of the WTO DisputeSettlement Procedure as an alternative to bilateral trade disputes. Finally,the chapter assesses the extent to which enforcement difficulties are likelyto be encountered in developing countries and examines the degree to whichthe administrative burden of enforcement can be offset by technical assistancefrom international institutions, developed country governments and globalcorporate actors, all of whom provide support to developing countries as theyseek to enforce the Agreement.

Beneficial effects of the TRIPs Agreement

Essentially, four types of benefit for developing countries can be identified asa result of the TRIPs Agreement: first, as multinational companies begin tofeel that their intellectual property assets are secure in developing countrymarkets, increased foreign direct investment (FDI) will result (see also UnitedNations Conference on Trade and Development 1996); second, levels oftechnology transfer or licensing are more likely to occur against a securelegal background and will ultimately lead to the transfer of know-how andexpertise that will contribute to local economic growth; third, the availabilityof intellectual property protection locally will result in higher levels ofdomestic innovation (see also Cosbey 2001: 18; Lehman 1999); and, fourth,the threat of bilateral trade sanctions from the United States may be less

Impact of the TRIPs Agreement on developing countries 109

likely because of the linkage of the TRIPs Agreement to the WTO DisputeSettlement Understanding. Each of these potential benefits is discussed inturn below.

Encouraging foreign direct investment

When, during the Uruguay Round negotiations, developing countries agreedto accept the TRIPs Agreement it was as part of a package deal wherebyprotection of intellectual property rights was a trade-off for concessions onagricultural products and textiles (see also Durán and Michalopoulos 1999:861; Grubb 1999: 49; Gutowski 1999: 756). Developed countries also arguedthat enhanced global protection of intellectual property rights would stimulatehigher levels of investment in developing countries (see also Correa 2000:23; Durán and Michalopoulos 1999: 853).

This proposition was supported by the work of Rapp and Rozek (1990),who, in their study of the correlation between a country’s economicdevelopment and its level of patent protection, identified benefits fordeveloping countries that were prepared to introduce higher standards ofintellectual property protection. Their findings are based on three rationales:first, that a well-developed patent regime encourages economic growththrough increased innovation and investment; second, that, conversely, weakpatent regimes impede economic development; and, third, that thesignificance of intellectual property rights increases as economic developmentoccurs because of greater potential for exploitation.1 With regard to the firstof Rapp and Rozek’s rationales, in practice, the degree to which the TRIPsAgreement can be expected to encourage direct investment and technologytransfer is likely to vary significantly not only between developing countries(United Nations Conference on Trade and Development 1996), but alsobetween sectors (see also Bronckers 1994: 1248), between economic activitiesand between product type (see also Correa 2000: 26).

Correa (2000: 270), however, remains generally pessimistic about theprospects for significant flows of foreign (as opposed to domestic) levels ofinvestment, reporting a United Nations (1993) study which concluded thatinnovative companies in developed countries are likely to sell directly todeveloping countries rather than transfer technology through FDI andlicensing agreements, and concluding that there is no evidence thatintellectual property protection will positively influence access to FDI at all(see also Di Pietro 2001: 3).

In any case, Primo Braga and Fink (1998: 541) observe that FDI flows todeveloping countries tend to be concentrated in a few countries, with four –China, Mexico, Malaysia and Brazil – accounting for 55 per cent of all FDIflows to developing countries in 1994 and 1995 (see also Primo Braga et al.2000:18). There is also little evidence that intellectual property protection isa key factor in encouraging research and development (Durán andMichalopoulos 1999: 855).

110 Impact of the TRIPs Agreement on developing countries

Although it is widely anticipated that the TRIPs Agreement will produceshort-term net benefits for multinational companies based in developedcountries (see, for instance, McCabe 1998: 54; Oddi 1996: 458), in the longerterm the potential benefits of innovation, joint ventures and investmentthrough greater transfer of technology and inflows of FDI may go some wayto redress the balance in favour of developing countries (see also Di Pietro2001: 4; Evans 1994: 143; Gutowski 1999: 752; Stanback 1989: 536). But thereality is that the time frame of this self-correcting effect remains uncertain(see Abbott 1996: 392–3) and the prospects for FDI flows to developingcountries remain hard to predict.

Encouraging technology transfer

The transfer of technology from developed to developing countries is likelyto be encouraged by higher levels of intellectual property protection for threereasons: first, the publication of patents may provide the backgroundinformation needed to stimulate new inventions in developing countries;second, the existence of patent protection may convince developed countrypatent owners to engage in licensing arrangements or undertake foreigndirect investment in developing countries; and, third, improvements inintellectual property protection in developing countries may create theincentives for developed country businesses to invest in new product research,such as medicines to cure tropical diseases, that it has hitherto lacked theeconomic justification to undertake (Durán and Michalopoulos 1999: 589).

Creating incentive structures for local inventors

Levels of innovation in developing countries may also increase in hightechnology sectors such as proprietary pharmaceuticals (see also Gutowski1999: 758) as a result of higher standards of intellectual property protection.Some authors, however, warn that since developing countries rarely possessa large stock of local inventors who could benefit from intellectual propertyprotection (Primo Braga et al. 2000: 25), any resultant benefits are faroutweighed by the cost of importing technology from foreign intellectualproperty owners (Sodipo 1997: 276; Stanback 1989: 535). The problemsassociated with applying standards of intellectual property protection acrosscultures via the TRIPs Agreement have also led to predictions that publicdiscontent will grow if the Agreement is perceived as a threat to nationalautonomy (Smith 1999: 223), particularly if developed countries are perceivedto ‘cream off scarce resources in royalty payments’ (Evans 1994: 143; see alsoEmmert 1990: 1355).

Oddi (1996: 460), moreover, predicts that implementation of the TRIPsAgreement will largely entrench import monopolies for multinationalcompanies, who will have little incentive for local working of inventions, withthe likelihood that developing countries will remain ‘consumer countriesrather than productive participants in world trade’. Certainly, there is some


evidence that the majority of patents granted by developing countries areheld by foreigners or foreign-owned companies, which then benefit fromroyalties with no guarantee that the patent will be worked locally (seeHenderson 1997: 654–5) or even that patented technology originating fromdeveloped countries will produce solutions to problems unique to developingnations (Mesevage 1991: 439).

It has also been argued that in many respects, innovative domesticindustries in developing countries suffer as much from inadequate intellectualproperty protection as do foreign companies (see also Sell 1998: 213) and, asdeveloping countries acquire strong constituencies of domestic intellectualproperty owners, the TRIPs Agreement may well be more widely seen to bein the national interest (see also Tasar 2000: 33). The transition fromtechnological imitators to innovators (Acharya 1996: 159) in the ‘tiger’economies of Hong Kong, Singapore, South Korea and Taiwan has resultedin a set of developing countries that face the same pressures as industrialisedcountries, with a rise in cost base leading to a need to improve productivitythrough increased investment in research and development (see Grubb 1999:49), and it is instructive to note that these tiger economies abandoned theiropposition to the TRIPs Agreement as the Uruguay Round negotiationsprogressed (Acharya 1996: 159). But for many developing countries, theprogression from technological imitators to innovators and creators of theirown stock of intellectual property remains largely unattainable.

Offsetting bilateral trade tensions

For developing countries, perhaps the most immediate incentive for ensuringeffective implementation and enforcement of the TRIPs Agreement mayactually be avoiding punitive sanctions on a multilateral or bilateral level ifnon-compliance is detected (McGrath 1996: 401). In this respect, todeveloping countries anxious to reduce trade tensions the legal certaintyoffered by the linkage between the TRIPs Agreement and the WTO DisputeSettlement Understanding may appear preferable to bilateral agreementslikely to result in sanctions, such as those threatened under Special 301 ofthe US Trade Act (see also Gutowski 1999: 757). For Oddi (1996: 469) thewider benefits of WTO membership may offset the narrower disadvantagesof the TRIPs Agreement. It remains to be seen how far the TRIPs Agreementwill stimulate the transfer of technology to developing countries through thegranting of licences – although not cost-free licences (Abbott 1996: 399) –and an increased willingness to invest in research and development inemerging markets (see also Pacón 1996: 356).

Limits on the beneficial effects of the TRIPs Agreement

But adequate protection of intellectual property rights is only one factor thatinfluences technology transfer, corporate location and investment decisions.The likely impact of the TRIPs Agreement is extremely difficult to


disaggregate from other factors, such as the availability of a skilled workforce,tax incentives, local transportation infrastructure, currency and politicalstability, and the size of domestic markets,2 although some studies haveattempted to do so. Abbott (1996: 391) highlights an absence of correlationbetween developing countries that grant high levels of intellectual propertyprotection and the level of FDI, observing that ironically among the countriesthat appeared on the USTR’s watch list for worst violators of intellectualproperty rights, namely Argentina, Brazil, North Korea and the People’sRepublic of China, are some that have received the most significant inflowsof US FDI over the past decade. Emmert (1990: 1367–9) furthermore arguesthat economic policy measures such as tax incentives, import policy, tariffsand rules on the employment of foreign experts have an adverse effect onR&D, these policy measures often being more important than the protectionof intellectual property in determining flows of inward investment. Overall,there is a range of reasons why global corporate actors may well not be undulyinfluenced by improved protection of intellectual property protection whenconsidering corporate location decisions relating to developing countries (seealso Abbott 1998: 504; Correa 2000: 24; Mesevage 1991: 439; Verma 1996:353). The United Nations Conference on Trade and Development (UNCTAD),in its study (1996) of the economic and social implications of the TRIPsAgreement, concluded that developing countries should try to strike a balancebetween the needs of innovative firms and their licensees for protection fromeasy appropriation of their intellectual property, on the one hand, and theneeds of follow-on competitors and consumers, on the other.

In the case of India, during the US complaint in relation to mailboxprotection, the US government and multinational pharmaceutical companiesargued that India should seize implementation of the TRIPs Agreement withenthusiasm as a means of attracting foreign investment, creating a viabledomestic research-based pharmaceutical industry to augment the largegeneric drug manufacturing sector that exists at present and increasing therate of technology transfer (according to Henderson 1997: 661). This scenarioassumes that local entrepreneurs can be found and that access to know-howcan be secured (see Mesevage 1991: 442). There is some evidence thatproprietary medicine manufacturers in India, such as Lupin, Ranbaxy andDr. Reddy’s, are well placed to take advantage of patent protection forpharmaceutical products (Ahuja 1994: 28; Parker 2001: 24) and Acharya (1996164) has expressed optimism that intellectual property protection is likelyto become a benefit for Indian industry as it develops rather than a burdenin much the same way as it did for the tiger economies of South East Asia.However, it should be noted that the proprietary pharmaceutical industry inItaly did not prosper under similar circumstances when patent protectionwas accorded to products in that sector in the recent past (see Giust 1997:96), so the prospects for growth in domestic industries should not beoverestimated. Although it may be that intellectual property protection willstimulate local innovation in developing countries, it should also be pointed


out that Reichman and Lange (1998: 46) remain mindful that this innovationmight have been achieved anyway by less socially costly means than the TRIPsAgreement.

Acharya (1996: 162) is unable to find irrefutable evidence to ascertainwhether the absence of strong intellectual property protection has been asignificant deterrent to innovation for foreign investment in India, where itwould appear that access to a low-cost and skilled workforce has played amore significant role in the strategic decision-making of multinationalcompanies than has the relative absence of a comprehensive intellectualproperty regime. This has particularly been the case in the computer softwaresector, where India has a thriving local industry (see also Cosbey 2001: 18),but it should be acknowledged that this industry relies less on copyright forprotection of its core business assets than the pharmaceutical industry, forexample, relies on patent protection. There may subsequently be a case forgeneralising less on a country-by-country basis and more significantly on thebasis of global markets, in particular high technology sectors such as softwareand pharmaceutical products.

Overall, there are likely to be winners from implementation of the TRIPsAgreement in India among the ‘talented class’ who will not find it necessaryto emigrate in order to advance their careers in high technology industriesand among the sick who will benefit from the investment in research anddevelopment designed to find cures for diseases in that subcontinent(Adelman and Baldia 1996: 533). But there will also be losers: those who willbe required to pay more for medicines than they would in a patent-freeenvironment.3 It is to the losers from the TRIPs Agreement that this chapternow turns its attention.

Costs of the TRIPs Agreement

Set against the potential benefits of the TRIPs Agreement for developingcountries, the costs of compliance should not be underestimated (Greer 1973:223; Kitch 1994: 166; de Koning 1997: 72). Patent protection, for instance, islikely to restrict access to technologies and information that may be crucialfor sustaining the health of poor populations and supporting development inboth the industrial and the agricultural sectors. McGrath (1996: 399) predictsthat, since the majority of patents are held by developed nations, poorcountries will be forced to pay high monopoly prices for patented productsunder the regime promulgated by the TRIPs Agreement, with the result thateconomic dependence on the developed world is likely to be exacerbated (seealso McCabe 1998: 54). If this scenario is correct, the most immediate impactof the TRIPs Agreement on developing countries would be higher prices4 forpatented pharmaceutical products,5 only in part offset by improved conditionsfor access to foreign technology (see also Correa 2000: 24, 36; Foster 1998:309).


Access to affordable pharmaceutical products

The debate about higher prices for patented products in developing countrieshas come to be epitomised by concerns that access to affordable drugs will behindered (see Drahos 1997: 207). For many developing countries, theunderlying rationale for excluding pharmaceutical products from patentprotection in the pre-TRIPs era was to enhance access to medicines and healthcare (see also Durán and Michalopoulos 1999: 856). Under the terms of theTRIPs Agreement, these countries now face the prospect that cheap, patent-free generic pharmaceutical products will be replaced by an increased relianceon patented pharmaceutical products imported by global corporate actors. Itwill be recalled from Chapter 3 that, under the transitional arrangementsprovided by Article 65.4 of the TRIPs Agreement, developing countries maydelay product patent protection to areas of technology not previouslyprotectable when the Agreement came into force in that Member. Article65.4 allows developing countries that did not previously grant patents topharmaceutical products to delay until 1 January 2005. Once these transitionalperiods have expired, there is a widespread expectation that the cost ofpharmaceutical products is likely to increase as a result of the TRIPsAgreement. Even when these transitional periods have expired there is, ofcourse, nothing to stop developing countries availing themselves of Article31 of the TRIPs Agreement by issuing compulsory licences on grounds ofpublic health needs (see also Durán and Michalopoulos 1999: 862), providedthat adequate compensation is paid to the right holder. But, in practice,granting compulsory licences may have its drawbacks. It may be difficult fordeveloping countries to establish a local manufacturing facility capable ofexploiting a compulsory licence, foreign companies may be reluctant to investin developing countries with a propensity to grant compulsory licences andthe internal procedures for granting compulsory licences might not have beenput in place (Abbott 2001: 12).

As a result, Henderson (1997: 662) and Adelman and Baldia (1996: 531)report that, although medicines sold in India are at present up to 3,010 percent cheaper than the same pharmaceutical product sold in developedcountries, prices are likely to rise rapidly in the former market once patentprotection for pharmaceutical products becomes fully applicable from 1January 2005 onwards. In response to these concerns, the Health andPharmaceuticals Programme of Consumers International Regional Officefor Asia and the Pacific (CIROAP) has been set up to campaign for nationalhealth care policies in developing countries and ensure access to affordablemedicinal products (see Balasubramaniam 2000). In practice, however, theactual price increases of proprietary pharmaceutical products in developingcountries are likely to vary depending on whether new products dominatethe market or whether off-patent alternative treatments are also available(Primo Braga et al. 2000: 33).

The potential impact of the TRIPs Agreement on access to affordablemedicines in developing countries was demonstrated most graphically in


March 2001 by the threatened action of forty-two globalpharmaceutical companies6 in South Africa. The companies, represented bythe Pharmaceutical Manufacturers Association of South Africa, complainedto that country’s Constitutional Court, objecting that the South AfricanMedicines Act would have given the Health Minister the power to grantcompulsory licences for patented pharmaceutical products when public healthwas at stake. The threatened legal action concerned Article 10 of the SouthAfrican Medicines and Related Substances Control Amendment Act 1997,which adds Section 15c to the 1965 Medicines and Related Substances ControlAct by allowing the Health Minister to abrogate patent rights, issuecompulsory licences and allow parallel importation of pharmaceuticals inorder to reduce the price of medicinal products (see also Ostergard 1999:875; Watal 1999: 18). These powers were, it was claimed by the PharmaceuticalManufacturers Association of South Africa, contrary to Article 31 of the TRIPsAgreement, particularly the requirement that compulsory licensing begranted only on a non-exclusive and non-assignable basis, with the possibilityof judicial review and with adequate remuneration for the patent holder.The case proved particularly emotive because access to anti-retroviralmedicines for the treatment of HIV/AIDS, such as AZT (Zidovudine), wasconstrained in South Africa by the prohibitively high price of the drugs (seeTickell 2001: 3).7

Notably, despite complaints by the US Government that the amendedSection 15c of the 1965 Act would be contrary to Articles 6, 27, 28 and 31 ofthe TRIPs Agreement, the United States itself did not choose to bring thematter before the WTO Dispute Settlement Body (see also Wooldridge 2000:109). It can be surmised that, on political and public relations grounds, theUnited States had stepped back from upholding the intellectual propertyrights of US companies abroad on wider grounds of security and internationaldiplomacy. In short, the US State Department appeared to have ruled outaction against South Africa because of the political significance of the post-apartheid regime in that country.8

The trend for lower prices for patented drugs in developing countriescontinued in August 2001 when Roche, the Swiss pharmaceuticalmanufacturer, agreed to a substantial price cut for its patented AIDS drug,Nelfinavir, in Brazil.9 Although Roche had initially offered a price reductionof 30 per cent, the Brazilian government argued that this was insufficientand threatened to issue a compulsory licence on public health grounds. As aresult of further price cuts, the issue was resolved with the local manufactureof Nelfinavir also secured, because Roche was able to announce the commercialviability of producing the drug locally in the light of Brazil’s large order.

The price of patented drugs may also have an adverse effect on publichealth if the medicinal product is marketed at such a prohibitively high pricethat it excludes consumer access for large sections of the local population(see also Acharya 1996: 160). One possibility for developing countries wouldbe to seek recourse to Article 27.2 of the TRIPs Agreement, which allows


WTO Members to exclude inventions from patentability where there arelegitimate reasons on grounds of ordre public or morality, including to protecthuman, animal or plant life or health or to avoid serious prejudice to theenvironment. But the scope of the public health exception remains limited.It denies local manufacturers the right to commercially exploit productslocally where a patent application from a foreign-based multinationalcompany has been refused.

But the picture of unreasonably high drug prices in developing countriesis not one that is uniformly accepted. Adelman and Baldia (1996: 531) andGrubb (1999: 48), for instance, counter that newly introduced patent lawswill have no effect on products that are already on the market, particularlysince the great majority of products on the Essential Drugs List of the WTOare no longer patented in any country. Grubb highlights a report by Redwood(1994) which found that in 1993 proprietary pharmaceutical productsoperating under developed country standards of patent protection would haveaccounted for only 10 per cent of the drug market in India. Even whenproprietary medicines are prohibitively expensive in developing countries,Grubb10 suggests that alternative therapies are normally available if thepatented drug is priced too highly. The global proprietary pharmaceuticalindustry also claims that it reinvests 14 per cent of total sales income onR&D, with only one in every 10,000 substances undergoing R&D proving asuccess in terms of beneficial medical results; even many of these fail at theclinical trial stage and never reach the market (see also Nogués 1990: 87).

Patenting of indigenous knowledge

Controversies have also raged over the interpretation of the TRIPs Agreementthat allows for the patenting of knowledge widely shared by indigenous peoples(see also Wilder 2001: 526).11 Because rights to indigenous knowledge arenot explicitly protected in the TRIPs Agreement, the complaint has beenthat patents allow global corporate actors to appropriate medicinal treatmentsused widely in developing countries. In India, for instance, applications havebeen put before the US Patent and Trademark Office (USPTO) for patentson turmeric and treatments derived from the neem tree, which have bothbeen used for centuries as remedies by local communities. On examinationof the turmeric and neem patent applications, the USPTO has, however,reached different conclusions as to the patentability of the subject matterput forward. In the case of turmeric, a patent application was filed in theUnited States based on the claim that turmeric augments the healing processof chronic and acute wounds. On re-examination, the claimed invention wasfound to be part of the public domain of knowledge in India (see Cullet 1999:627) and a patent subsequently denied. Patents have, however, been grantedon the dozen or so applications filed before the USPTO that relate to theproperties of the neem tree. Neem has been used in India as a medicine,toothpaste, form of contraception and insecticide for hundreds of years (seeCullet 1999: 628; Shiva and Holla-Bhar 1996: 150), yet the granting of patents


by the USPTO appears to allow for the appropriation of indigenous knowledgeto an extent not envisaged by developing countries. Attempts, led by NGOs,are now under way to strengthen the rights of indigenous peoples. Theseattempts are discussed in Chapter 6.

The challenge for developing countries: effectiveenforcement

The task of achieving developing country compliance with the provisions ofthe TRIPs Agreement operates on two levels: first, implementation andsecond, enforcement. Implementation, namely the adoption of appropriatelegislation to bring national judicial and administrative procedures intoconformity with the TRIPs Agreement, has generally been less problematicfor developing countries than practical enforcement of standardsof intellectual property protection on the ground. The reason thatimplementation has been achieved with relative ease is that many developingcountries amended their intellectual property laws prior to the TRIPsAgreement in response to pressure exerted by the United States bilaterallyunder Special 301 (according to Ryan 1998: 144). But implementation of thepolicy requirements of the TRIPs Agreement is very different from theongoing effective enforcement of intellectual property rights. As Susan Sellputs it, ‘there is a sharp distinction between the adoption of these policiesand their enforcement’ (Sell 1998: 188; see also de Koning 1997: 63).

Although appropriate provisions may well be on the statute books indeveloping countries now that the transitional period for implementing theprovisions of the TRIPs Agreement has expired, effective enforcement maytake years to achieve (see also Dreier 1996: 272) and incur unexpectedlyhigh costs on developing countries (Stanback 1989: 536) that are required toimprove their judicial, administrative and enforcement procedures. Giventhe broad remit of enforcement provisions set out in Part III of the TRIPsAgreement, which includes border measures, civil actions and criminalproceedings,12 the need for expertise extends across a wide range ofprofessions from the judiciary, customs officials and local trading standardsofficers, to the local police force (see also Trainer 2000: 16).

In this respect, enforcing the TRIPs Agreement challenges theadministrative and judicial capacity of developing countries (see Di Pietro2001: 2; Sherwood 1997: 136). An absence of legal expertise within the courtsystem and an absence of technical expertise among local enforcement officerspresents a situation whereby long delays are likely in handing downjudgements relating to enforcement of measures (see also Daniel 1999: 18).

One area in which developing countries are reported to be encounteringparticular difficulties is in relation to border measures (see, for example,Smith 1997: 30), with Dreier (1996: 271) identifying a number of problemsas developing countries seek to secure their borders against unlawfulimportation of infringing goods in the face of difficult terrain, long coastlines,desert or jungle borders. Corruption among government officials who are


‘overlooking infringements’ has also been reported to be a problem (Tasar2000: 31). Customs officials often lack sufficient expertise to identifycounterfeit trademark and pirated copyright goods, but identifying patent-infringing goods has proved even more problematic as a result of the natureof the commodity (such as generic pharmaceutical products) (see also Smith1997: 30).

In the face of the perceived limitations of public sector TRIPs enforcementactivities in developing countries, one recent trend has been the emergenceof private enforcement agencies such as Enforcers of Intellectual PropertyRights in India Ltd,13 which advertises its services as an India-wide networkof private agents who engage in infringement investigation, litigation supportand multi-jurisdictional actions. Intellectual property private investigatorsof this type, who offer their services to local or multinational companiesconcerned about inadequate public sector enforcement mechanisms, are likelyto become a growth area in developing countries in the future.

Likely outcomes

A number of predictions have been made about the most likely course ofaction that developing countries will take in response to the TRIPs Agreement.Reichman (1998: 587–8) predicts that developing countries will find plentyof ‘wiggle room’ and ‘grey areas’ in the TRIPs Agreement in which to exploitthe bulk of the domestic intellectual property laws that remains outside theminimum standards set out by the Agreement. Moreover, he points out, the‘wiggle room’ may be greatest in relation to key areas of new technologies,including computer programs, databases, digitised telecommunicationsnetworks, and biogenetic engineering (Reichman 1998: 589). Subramanianand Watal (2000: 405) have even suggested that developing countries shoulduse their commitments to implement the TRIPs Agreement as a retaliatoryweapon, terminating or shortening intellectual property rights owned byforeign nationals in the event of developed country trading partners failingto comply with their WTO obligations in other areas and where conventionaltrade retaliation proves an insufficient sanction.

Less pessimistic is the view adopted by Primo Braga and Fink (1998: 552),who suggest that developing country concerns about the monopolisticbehaviour of multinational companies, with the associated lack of benefits tolocal entrepreneurs and consumers under the TRIPs Agreement, can bealleviated. They suggest that assistance for developing countries can beachieved by:

1 using global business actors as ‘honest brokers’ to bring together differentinterests and educate policy-makers and the public about the complextrade-offs associated with intellectual property protection;

2 providing bilateral and multilateral assistance in setting upadministrative structures for protecting intellectual property rights;


3 enhancing the environment under which intellectual property rightsoperate through competition-related policies, rights to biotechnologicalresources and indigenous knowledge; and

4 providing bilateral and multilateral support to research the role ofintellectual property rights in the economic development process.

Technical assistance for developing countries

The availability of technical assistance for developing and least-developedcountries is not only seen as crucial in ensuring the effective enforcement ofthe TRIPs Agreement (see, in particular, Khlestov, 1997; Otten and Wager1996: 410). It is also a potentially effective mechanism by which developedcountries and global corporate actors can offset the worst excesses of costimplications associated with TRIPs compliance in developing countries. Theprovision of technical assistance is also an area in which collaboration betweenthe TRIPs Council of the WTO and the World Intellectual PropertyOrganisation (WIPO) has been viewed as being of great significance, adding‘a new urgency’ to the role of WIPO (Ryan 1998: 132) and, despite the rise ofthe WTO as arguably the primary global economic institution responsiblefor international intellectual property protection, WIPO has remained animportant organization in the provision of advice and expertise on compliancewith international intellectual property obligations (see Otten 1998: 529).

The concerns that were raised during the Uruguay Round negotiationsabout the likelihood of GATT institutions duplicating and recreating WIPO’sexpertise and administrative apparatus (see, in particular, Merges 1990: 241and an appraisal of the administrative culture of WIPO in Ryan 1998: 137–8)have proved largely unfounded. In fact, because WIPO possesses a large budgetderived from its status as a UN agency, has accumulated vast specialistexpertise over the years and can draw on the knowledge and experience ofthe hundreds of international and national NGOs to which it has grantedobserver status (according to Braithwaite and Drahos 2000: 68), the benefitsof collaboration between the WTO and WIPO on international intellectualproperty protection have proved self-evident. To this end, the TRIPs Counciland WIPO concluded an agreement on cooperation, which came into forceon 1 January 1996. 14 The agreement provides for cooperation in three mainareas: first, notification, access to and translation of national laws andregulations; second, implementation of procedures for protection of nationalemblems; and, third, technical cooperation.

In the post-Uruguay Round era, the role of WIPO has been redefined. Itnow plays an important role in the provision of information and advice todeveloping countries. WIPO now regularly organises workshops to traincustoms and judicial officials from developing countries and, given its farlarger resource base than the WTO, is well placed to continue to play anactive role in educating and advising developing countries of how best toenforce their international obligations (see also Durán and Michalopoulos


1999: 863). It has been reported that global business interests have praisedthe teaching function of WIPO (Ryan 1008: 131). This is perhaps notsurprising if one accepts Reichman’s (1998: 592) assertion that some of thefirms, trade associations and governments in the developed world have exertedpressure on international organisations such as WIPO in an attempt toconstrain the advice that is offered to developing countries, with the aim ofreplicating developed country laws rather than adopting a more imaginativeapproach. The implication that attempts have been made by global businessinterests to capture WIPO therefore appears to hang over its role in providingtechnical assistance for developing countries. A more explicit role for globalcorporate actors is also envisaged under Article 67 of the TRIPs Agreement.

Article 67 of the TRIPs Agreement requires that developed countriesprovide technical and financial cooperation to enable developing and least-developed countries to enhance their enforcement capabilities (see alsoBronckers 1994: 1279; Durán and Michalopoulos 1999: 856). Reichman (1997:355) even proposes that (corporate) rights holders should devote a share oftheir expected gains to making a contribution to local enforcement agenciesin poorer developing countries. The WTO TRIPs Secretariat has declaredthat the TRIPs Council will monitor closely the assistance given by developedcountry governments and private actors in this respect (Giust 1997: 96; Ottenand Wager 1996: 410). Technical assistance of this type is essential fordeveloping countries to reform their intellectual property systems. Withoutthis assistance, many developing countries would simply lack the financialresources, expertise and administrative capacity to achieve effectiveenforcement. In the short term, therefore, the help of government officialsand global corporate actors from developed countries is seen as crucial inassisting legislative, administrative and enforcement bodies in the developingworld (Verma 1996: 359).

Groups representing corporate intellectual property interests in the UnitedStates have been active in fulfilling this role, with the IPC involved in providingtraining sessions for government officials from developing countries; it hascooperated with WIPO by providing a list of named speakers from businesswho are willing to assist with training and awareness exercises in thedeveloping world. Global business has also been active through theestablishment of public–private partnerships between international inter-governmental institutions and global corporate actors, formalised under theumbrella of the United Nations Economic Commission for Europe (UN/ECE)Advisory Group on the Implementation of Intellectual Property Rights forInvestment. The Advisory Group has the objective of encouraging improvedstandards of intellectual property protection in Eastern Europe and theCommonwealth of Independent States (CIS), with sponsorship provided byGillette, the IFPI, Merck, Microsoft, Philip Morris and corporate sectororganisations including Interpat.15

Yet the view from the United States – a view held in both business andgovernment – tends to be much more mixed on the issue of providing


information and advice than in the European Communities. Some businessgroups are largely opposed to providing technical assistance to developingcountries, with the IIPA of the opinion that the requisite political willnecessary to achieve enforcement of the TRIPs Agreement in developingcountries does not necessarily require any technical assistance on the part ofdeveloped countries at all, assistance often being seen as a sign of weaknesson the part of developed countries at the very time that pressure needs to beexerted on developing nations. Other business groups, such as the IPC, havetaken part in business delegations to developing countries with a view todisseminating best practice in intellectual property protection.

The European Communities, on the other hand, have sought to distinguishbetween getting the appropriate legislative instruments on the statute booksin developing countries, for which technical assistance is not necessarilyrequired, and enforcing intellectual property protection, for which trainingof government officials and the judiciary can usefully be offered. There areeven those within the European Commission who hold the view that theapparent US antipathy towards the provision of technical assistance todeveloping countries is actually because the US government does not, inreality, have access to the financial resources to undertake the type of technicalaid programme that the European Communities have operated so well. Whilethe United States has been able to offer a small amount of technical assistancevia FBI training of enforcement officers in developing countries, the viewfrom the European Communities is that an under-resourced administrationlike the USTR does not have the capability to engage in the type of initiativepioneered by the European Commission. For this reason it is largely left tothe European Communities to fund technical assistance projects and to stressthe need for a balanced carrot and stick approach to granting financial andtechnical assistance. From the EC perspective, the ‘stick’ comes in the formof bilateral trade agreements which include a requirement that improvementsbe made in intellectual property protection in return for trade privileges, inthis respect no different from the US bilateral approach used so effectivelysince the mid-1980s.

EC business has played an important role in the provision of informationand advice in developing countries. The Scottish whisky distillers, for example,have undertaken an ongoing programme of advising customs officials fromcountries with particularly large markets for counterfeit brands of whisky(such as Bulgaria) and of training officials to detect the genuine spirits.Similarly the phonographic industry, which is particularly strong in the UnitedKingdom, has been active in advising customs officials on how to detectcounterfeit compact disc recordings. In this respect, the frontline experienceand expertise of UK business gives it a notable advantage over its nationalgovernment officials. The involvement of UK business in the provision ofassistance for developing countries also provides the United Kingdom withthe opportunity to send a list of technical assistance programmes to the TRIPsCouncil annually. Although the submission of such a list is not a legal


requirement, it provides the United Kingdom with the opportunity tounderpin the UK’s record of assistance for developing countries, particularlythrough the know-how fund for Central and Eastern Europe, with practicalexamples from the industries concerned.

The European Communities also play an important role in the provisionof information and advice for developing countries through financialassistance to fund education programmes such as the Technical Assistanceto the Commonwealth of Independent States and Mongolia (TACIS)programme16 and the Poland and Hungary: Aid for Economic Restructuring(PHARE) programme,17 which provides assistance for other countries inCentral and Eastern Europe. Similarly, the European Communities haveprovided technical assistance to countries in the Association of South EastAsian Nations (ASEAN)18 and China to assist with improvements onintellectual property protection.

Assessment

The likelihood is that the TRIPs Agreement will have an adverse short-termsocio-economic impact on developing countries, only partly offset by theprovision of advice and assistance from WIPO, developed country governmentsand global corporate actors. The result is that the debate on the impact ofTRIPs has fundamentally changed since the Agreement was first devised. Inthe light of predictions that the TRIPs Agreement will have an adverse impacton developing countries, the arguments against international standards ofintellectual property protection have grown considerably since the end ofthe Uruguay Round negotiations. In the light of these concerns, the prospectsfor review and renegotiation of the TRIPs Agreement are examined in thenext chapter.

6 Future of the TRIPsAgreement

Global corporate actors see the TRIPs Agreement as a major achievement.It is certainly true that, by raising intellectual property as a significant issuefor international trade during the Uruguay Round, business interests indeveloped countries demonstrated a remarkable propensity to engage inalliance building, achieving a consensus in favour of improved internationalintellectual property protection that was to hold firm throughout negotiationsfor the TRIPs Agreement. Corporate actors also showed themselves to beastute negotiators, recognising early on the importance of strategicrepositioning and forum shifting from an initial bilateral approach relianton US trade legislation to a multilateral approach involving US, Europeanand Japanese actors with the objective of linking intellectual property to tradethrough the Uruguay Round of GATT. The consensus achieved demonstratedthe heterogeneity of corporate interests worldwide and raised intellectualproperty rights as a new agenda item for international trade negotiations.Without the global corporate consensus there quite simply would have beenno WTO Agreement on Trade-Related Aspects of Intellectual Property Rights.Technical support provided by industry experts was also crucial, providingUS and EC delegations to the Uruguay Round with the detailed practicalknowledge of intellectual property rights that public officials on occasionlacked.

There is now a risk, however, that although global corporate actors areworking hard to maintain the momentum that made possible theachievements of the Uruguay Round, those efforts may be undermined by afragmentation of the very consensus among global corporate actors anddeveloped country governments that made the TRIPs Agreement possible inthe first place. This chapter considers the extent to which global businessinterests have been able to hold together the industry consensus that provedso significant during the Uruguay Round negotiations. It also considers theextent to which fragmentation of the consensus has been precipitated by arange of pressures both internal to the global business community andexternal to it.

124 Future of the TRIPs Agreement

Will the Uruguay Round consensus hold?

The Transatlantic Business Dialogue

At the outset it must be acknowledged that, to a large extent, the commoninterests that made possible the Uruguay Round consensus still exist. Globalcorporate actors and developed countries have worked hard on preparationsfor a review of the built-in agenda of the TRIPs Agreement. At the sametime monitoring implementation and enforcement has become a high priorityfollowing the expiration of the Article 65 transitional arrangements fordeveloping countries. One of the main venues for maintaining the globalbusiness consensus on these issues has been the Transatlantic BusinessDialogue (TABD). The TABD, which held its first conference in Seville inNovember 1995, was initially conceived as a mechanism through whichcompanies and business associations could develop joint US–EC trade policyrecommendations by working together with the European Commission andthe US Administration. The TABD now involves representatives of a rangeof companies in the United States and Europe that have transatlanticcommercial interests. It seeks to offer a framework for cooperation betweenthe transatlantic business community and the governments of the UnitedStates and European Communities across a range of issues includingstandards, certification and regulatory policy; market access; governmentprocurement; investment; business practices; export controls; taxation;customs; small and medium-sized enterprises; and intellectual propertyrights.1

With respect to intellectual property rights, the TABD has provided aforum for dealing with unresolved issues on intellectual property protectionin respect to deficiencies in both bilateral and multilateral arrangements. InMay 1996, under the auspices of its Intellectual Property Issues Group, theTABD produced an interim report on what needed to be done to revise theTRIPs Agreement. By October 1997 those interim findings had beenformalised, at a symposium involving officials from the US government andthe European Commission, into an Intellectual Property Issues Group ActionPlan. Among the recommendations contained in the Action Plan was anundertaking that the United States and European Communities should worktogether at both government and industry levels to coordinate efforts toprovide training and technical assistance designed to assist developingcountries in meeting their obligations in accordance with Article 67 of theTRIPs Agreement. The Action Plan also recognised the importance of effectiveenforcement mechanisms as a means of reducing piracy levels throughremedies, damages and criminal penalties.

By November 1996 the aims of the Action Plan were formalised in theTABD Chicago Declaration, which included calls on the United Statesand European Communities to launch efforts to ensure acceleratedimplementation of TRIPs obligations in developing countries and to achievemaintenance of non-discriminatory regimes conducive to full market access

Future of the TRIPs Agreement 125

for intellectual property protected products. Chicago also set in motion theprocess of drafting a so-called ‘Living Annex’ to the Declaration, setting outthe deficiencies in intellectual property protection and enforcement indeveloping countries that the TABD wished to bring to the attention of theUS and EC authorities. In the Annex, the TABD identified countries havingdeficiencies in their intellectual property protection and enforcementresulting in significant commercial losses to industry. The Annex remainsundated so that it can be regularly updated, with initial priority given tothose countries representing the most important markets for US and ECbusiness, namely Argentina, Brazil, Canada, Hungary, Israel, India, Indonesia,Japan, Mexico, the People’s Republic of China, the Russian Federation andTurkey.

In addition to the TABD’s concerns about inadequate intellectual propertyprotection in developing countries, the Living Annex sets out a range ofdifferences between the United States and the European Communities, wherefirst-to-file continues to be a major issue within patent harmonisation. TheUnited States, it will be recalled, has a patent system based on the principleof first-to-invent with the result that, from the EC perspective, legaluncertainty and additional costs are introduced into the patent system.2 TheEuropean Commission initiative on a ‘New Transatlantic Marketplace,3 raisedthe stakes on first-to-invent further in March 1998, describing the US systemas ‘anachronistic’ and ‘extremely demanding in terms of evidence for allinventive activities’.4 The significance of these differences between the UnitedStates and the European Communities as factors contributing tofragmentation of the Uruguay Round consensus is discussed later in thechapter.

The IPC and the ‘Millennium timebomb’

A related proposal to focus the attention of the business community onimplementation and enforcement of the TRIPs Agreement in developingcountries was initiated in February 1998 when the IPC, which spearheadedthe original business transatlantic initiative during negotiations for the TRIPsAgreement, proposed to UNICE that TRIPs implementation issues shouldmark a continuation of the IPC–UNICE alliance that had worked sosuccessfully during TRIPs negotiations. The IPC proposal resulted in whatbecame known as the ‘Gorlin Draft’, an international strategy which soughtto prevent a ‘Millennium timebomb’ of developing countries coming forwardin accordance with the Article 63 TRIPs Council review procedure on 1 January2000 to demonstrate the conformity of national measures taken to ensureeffective enforcement of the TRIPs Agreement. In practice the IPC andUNICE feared that developing countries would be unable to provide evidencethat those enforcement levels had been met, effectively extending thetransitional periods available for developing country compliance.5 In addition,the Gorlin Draft anticipated that the WTO Dispute Settlement Procedures


would be overwhelmed by a flood of WTO intellectual property complaintswith the result that the effectiveness of the WTO to develop and enforceinternational rules would be seriously called into question.

The strategy recommended in the Gorlin Draft was fourfold: first, thatindustry should seek to activate governments, namely to encourage the WTOdelegations from the developed world to put pressure on developing countriesin the TRIPs Council to ensure effective enforcement; second, to initiate aprocess by which representatives from industry would participate in regionalconferences designed to raise awareness of the significance of intellectualproperty protection in developing countries; third, to ensure that industrycontinued to engage bilateral investigations, namely monitoring andsurveillance exercises to ascertain whether developing countries were meetingtheir obligations under the TRIPs Agreement; and, fourth, to encourage theprovision of technical assistance to developing countries via industryinvolvement in initiatives undertaken by WIPO, public awareness campaignsand Embassy programmes organised in developing countries.

The Gorlin Draft resulted, on 5 May 1998, in the issuance of a joint IPC–UNICE statement, expressing concern that a large number of developingcountries would not have adopted the laws and regulations necessary to bringthem into compliance with the TRIPs Agreement by the ending of the Article65 transitional arrangements. The joint statement concluded by calling onthe European Commission and the United States and European governmentsto intensify their efforts to ensure proper and timely TRIPs implementationin developing countries.

Global business has also continued to press its case for close scrutiny ofdeveloping country implementation and enforcement of the TRIPs Agreementthrough a direct dialogue with the WTO Secretariat in Geneva. In September1998 a joint IPC–UNICE delegation travelled to Geneva to advise the TRIPsSecretariat on industry priorities, particularly in relation to ensuring that allobligations under the TRIPs Agreement are complied with before undertakinga new round of WTO trade negotiations and making recommendations as tohow to avert a ‘Millennium timebomb’ in developing countries. Thatdelegation from the business community included Jacques Gorlin of the IPCand strong representation from the global proprietary pharmaceuticalindustry in the form of patent experts from GlaxoWellcome and Pfizer.

The pharmaceutical industry: pipeline protection andsupplementary protection certificates

The global proprietary pharmaceutical industry has also been active in seekingrefinement of the TRIPs Agreement, with calls for pipeline protection formedicinal products and improvements to the arrangements under TRIPs forthe handling of confidential information required for regulatory approval.Article 39.3 requires that Members protect undisclosed test or otherinformation against unfair commercial use, except where necessary to protect


the public, during the process of approving the marketing of newpharmaceutical or agricultural chemical products that utilise new chemicalentities. The omission of a fixed period of protection for data included inregulatory submissions leaves open the prospect of individual countriesoffering lax standards, given that discretion as to the length of duration fordata protection is to be retained by WTO Members. The pharmaceuticalindustry in the United Kingdom has been particularly critical of Article 39.3on the grounds that it does not provide sufficient protection for informationprovided as regulatory submissions because the TRIPs Agreement providesinsufficient clarity as to the term of protection that is required. In most ECcountries, including the United Kingdom, ten-year protection exists, withSpain increasing its term of protection from six to ten years at the end of the1990s. Nevertheless, Portugal continues to offer protection for a maximumof six years, and data protection for regulatory submissions in the UnitedStates only operates for a five-year period.

Similarly, the global pharmaceutical industry remains dissatisfied that theTRIPs Agreement does not provide for an extension to the term of patentprotection equivalent to the five-year supplementary extension certificatesthat are available for pharmaceutical and agricultural chemical products in,for instance, the United Kingdom, the United States and Japan. In thisrespect, the TRIPs Agreement merely provides for a basic twenty-year periodof patent protection which, it is argued by industry, fails to take account ofthe regulatory approval procedures that new drugs and chemical substancesmust undergo for a number of years before they can be made available on themarket. The reason why supplementary extensions to the duration of patentlife were not included in the TRIPs Agreement appears to have been thathaving moved from a pre-TRIPs situation in which more pressing issues, suchas use of compulsory licences, had been dealt with to the benefit of thepharmaceutical and agricultural chemical industries, it was then difficult tosustain a negotiating position to the effect that these same companies shouldbenefit from positive discrimination in the form of supplementary patentcertificates.

Signs of fragmentation in the Uruguay Roundconsensus on intellectual property

In the wake of the successes of global corporate actors and developed countrygovernments in terms of achieving consensus on the need for a TRIPsAgreement during the Uruguay Round, there are indications that theconsensus is now beginning to fragment. These signs of fragmentation canbe categorised into the following issues: the role of institutions as gatekeepers,principally the USTR and the EC’s Article 113 Committee, which mustrespond to the wider imperatives of international diplomacy in addition tosafeguarding the intellectual property interests of its nationals abroad; factorsinternal to the global business community that have led to cracks in the


Uruguay Round consensus previously enjoyed during TRIPs negotiations;factors external to the global business community in the form of entry bynew actors that have been mobilised since the end of the Uruguay Round;and the impact of Reports issued by Dispute Settlement Panels of the WTOthat have limited the scope of complaints which have been allowed relatingto the TRIPs Agreement. This chapter examines each of these in turn.

Institutions as gatekeepers

The limits of international diplomacy

As discussed in Chapter 4, the role that the USTR engages in to manage itsrelations with corporate actors is very much that of an institutional‘gatekeeper’, with US policy-makers often constrained by wider issues ofpolitical diplomacy when considering whether to act on complaints by privatebusiness interests regarding TRIPs Agreement implementation problems.This gatekeeper role creates a situation in which, by using its discretionarypowers to decide whether to bring complaints relating to compliance withthe TRIPs Agreement before the WTO, the US Administration will be mindfulof wider issues relating to national security and foreign policy. Policy issuesoutside the scope of trade relations therefore have a considerable potentialto influence the US Administration’s decision on whether or not to bring acomplaint against another WTO Member under the Dispute SettlementProcedure.

As a result, US corporate actors have complained that the stated US policyof ensuring compliance with the TRIPs Agreement is hindered by widerconcerns relating to international diplomacy, with the USTR not the onlyagency in the Administration with an interest in developing countries. Theresult has been that the USTR has in the past been reluctant to initiatecomplaints against Argentina for inadequate patent protection ofpharmaceutical products or against South Africa for measures allowingparallel imports and arrangements for granting compulsory licensing forpharmaceutical products. This reluctance to act on the part of the USTRremains a source of frustration for corporate actors that fear the achievementsof the TRIPs Agreement will be undermined if the US Administrationcontinues to allow wider diplomatic concerns to take precedence over theneed to ensure effective intellectual property protection via complaints tothe Dispute Settlement Body.

Chapter 4 also showed that similar diplomatic constraints have beenencountered in the European Communities, where the Article 113 Committeeprocedure in principle offers a mechanism for action against recalcitranttrading partners with each EC Member State holding the procedural rightto ask the Commission to investigate allegations of inadequate intellectualproperty protection in non-Member States. As in the United States, however,international diplomacy often creates problems leading to inaction against


recalcitrant third countries. Since unanimity among the fifteen EC MemberStates is required before the Article 113 Committee can decide to take actionagainst a country deemed to provide inadequate protection of intellectualproperty rights, the reality is that at any given moment it is likely that atleast one Member State will be at a sensitive stage in its relations with acountry that will lead it to step back from supporting the sanctioning of actionby the Article 113 Committee. In this respect, the Committee frequentlyacts as a ‘gatekeeper’ in much the same way as the USTR, filtering outcomplaints based on grounds of inadequate intellectual property protectionwhere international relations concerns take primacy over narrower tradeissues.

Disputes between actors in developed countries

For many global corporate actors, trade-related intellectual property rightshave now ceased to be an issue deemed to be of sufficient urgency to garnerconsensus among an otherwise disparate corporate lobby in its relations withgovernment policy-makers with regard to trade matters. In this respect, theTRIPs Agreement is seen by many of the key players involved in buildingbusiness consensus in the run-up to the Uruguay Round as being onlyachievable at a particular moment in time through a coming together ofpan-industry global business interests.

Some credence can be accorded to the view that the developed countryconsensus that lay at the heart of the TRIPs Agreement has begun to showincreasing signs of strain since the conclusion of the Uruguay Round if oneobserves the series of complaints brought before the WTO Dispute SettlementBody. As predicted by Reichman (1995: 390), the TRIPs Agreement has setdeveloped countries against other developed countries. In addition to thedisputes already discussed in Chapter 4, the European Communities havemade complaints to the DSB in relation to Sections 301–10 of US Trade Actof 19746 and in relation to Section 110(5) of the US Copyright Act,7 and theUnited States has made a complaint in relation to Section 44 of the CanadianPatent Act.8 These disputes between developed country governments havedominated Dispute Settlement Panels’ deliberations in relation to the TRIPsAgreement to an extent that is surprising, even given that the existence oftransitional periods under Article 65 of the TRIPs Agreement may thus farhave limited the number of disputes involving developing countries.

Even outside the realm of Dispute Settlement Panels, tensions betweenthe United States and the European Communities were apparent as early asMarch 1998, when European Commissioner Sir Leon Brittan announcedproposals for a new US–Europe trade area. The Brittan proposals highlightedthe differences between the United States and the European Communitieson first-to-file and were criticised by many intellectual property experts inthe corporate sector precisely because they raised the differences betweenUS and EC business interests at the expense of an opportunity to present a


common front against poor intellectual property protection in developingcountries. Given that the European Communities have continued to putpressure on the United States bilaterally to adopt a first-to-file procedure,the issue appears likely to continue to be divisive and has significant potentialto undermine developed country consensus during any future review of theTRIPs Agreement (see also Watal 1999: 17).

The potential of the first-to-file debate to undermine developed countryconsensus is also apparent at the level of the TABD. Although there havebeen calls from IPC and Interpat for the TABD to become a more cooperativeforum in which the interests of business in the United States and EuropeanCommunities can be coordinated so as to present a unified voice to developingcountry governments, in practice companies have criticised the tendency forthe TABD to spend too much time and effort trying to resolve the first-to-fileissue. Even where the TABD has been able to act coherently in relation tointellectual property protection, such as via the ‘Living Annex’ to the ChicagoDeclaration, there are concerns among the business community that thisstrategy of putting pressure on developing countries can be counterproductive,sending the wrong message by indicating that global corporate actors areexerting undue pressure to improve intellectual property protection withindeveloping countries in a manner which is interpreted as challengingdeveloping countries’ national sovereignty.

The immediate task for groups representing global business interests mustbe to ensure that developing countries have fulfilled their obligations at theend of the transitional period, then worry about what the terms of the TRIPsAgreement actually require later, finally dealing with ‘wish lists’ of what theTRIPs Agreement would look like in an ideal world. Yet, although the remitof single-issue groups representing business interests, such as the IPC andIIPA, now includes monitoring implementation of the TRIPs Agreement indeveloping countries, in practice companies are now more focused on industry-specific intellectual property issues. Although the key to the success in gettingintellectual property protection on to the Uruguay Round agenda andsubsequently achieving the terms set out in the TRIPs Agreement was thecohesiveness of US industry and its willingness to speak with one voice, thepre-TRIPs Agreement consensus across industries on a global scale has nowbecome more focused on gaining competitive advantage than on commongoals. Even within industry sectors, there are signs of tension in the previouslysolid pro-TRIPs Uruguay Round consensus. On pipeline protection, forexample, individual proprietary pharmaceutical companies are seeking togain competitive advantage by disputing when the retroactive effect shouldstart, with arguments centring on commencing retroactivity depending onwhen their own patents and those of their competitor firms were first filed.

Entry of new actors

The global corporate consensus in favour of the TRIPs Agreement also facesthreats as new actors, namely industries, NGOs, WTO Members and


international institutions not active during the Uruguay Round process inrelation to intellectual property negotiations, enter the debate on the futureof TRIPs.

Industry

Of particular significance among these new actors are generic drugmanufacturers that have entered the debate on the current impact and futurereform of the TRIPs Agreement in a concerted manner since the end of theUruguay Round, becoming better organised and more likely to present thegeneric industry’s viewpoint on an international scale (Waters 1996: 771). Inthe pharmaceutical sector the impact of a better coordinated and morearticulate generic drug industry is that proprietary companies no longer havea clear route of access to government in relation to public policy oninternational intellectual property protection. There is also concern amongproprietary pharmaceutical companies that generic companies are alreadythinking about how to work at the margins of the TRIPs Agreement, usingloopholes and interpretations of the text in a manner capable of allowing competitive advantage to accrue to manufacturers of off-patentpharmaceutical products. There may be some genuine grounds for theseconcerns given the attempted interpretation of Bolar exemptions and relatedstockpiling provisions rules in Canada, Israel and Cyprus, as discussed inChapter 4.

Non-governmental organisations

NGOs with concerns about the impact of the TRIPs Agreement in relationto health care, developmental and environmental issues (see also Newell 2000:117) are increasingly articulating their views in a way that was almost entirelyabsent during the Uruguay Round negotiations leading to the TRIPsAgreement. These NGOs are likely to enjoy a much higher profile in anyfuture round of WTO negotiations, not least because the WTO is now anxiousto improve the legitimacy of its activities through interaction with civil societygroups.9 NGOs are, for their part, seeking to provide a voice capable ofspeaking up for developing countries (see also Abbott 1996: 400), which wereperceived as lacking negotiating expertise and bargaining power during theUruguay Round. In this respect, US-based groups such as the InternationalForum on Globalization10 and Public Citizen11 have been active in predictingthat the TRIPs Agreement will have adverse effects on developing countries,particularly due to rising consumer prices, infringements on the rights ofindigenous peoples and adverse effects on biodiversity (see also Drahos 1997:206). Blakeney (2001: 540) also describes the work of the federation ofindigenous peoples groups that, on 25 July 1999, issued a statement expressingconcern that Article 27.3(b) of the TRIPs Agreement would further denigrateand undermine their rights to cultural and intellectual heritage. A coalitionof NGOs and local groups in developing countries is therefore highlighting


the likelihood of a negative effect of the Agreement in a way that was simplynot evident during the Uruguay Round negotiations.12

The perceived plight of farmers in developing countries is a case in point.The crucial international agreement relating to farmers in developingcountries is the UPOV Convention on Plant Breeders’ Rights, which, althoughnot explicitly mentioned in the TRIPs Agreement, has been widely taken asa model for many developing countries that opt to exclude from patentabilityplant varieties, relying instead on a sui generis system as specified in Article27.3(b). Adopting the UPOV Convention on the basis that it offers the mostreadily available form of sui generis protection, however, has drawbacks fordeveloping country farmers. The UPOV Convention has been revised threetimes, in 1972, 1978 and 1991. Although the last revision of the Conventionis still acknowledged as being far less extensive in scope than the TRIPsAgreement provisions on patent protection (Pacón 1996: 345), in a movedescribed by Reichman (1995: 359) as having ‘elevated these standards ofprotection from a modified copyright model to a modified patent model’,WTO Members opting to become signatories to the 1991 version of UPOVas a means of avoiding patent protection for plant varieties do face drawbacks.The main problem is that, whereas the 1978 version of the UPOV Conventionhad been widely interpreted as allowing farmers to save and exchange seed(Tancer and Tancer 1999: 907), the 1991 version does not allow this. As aresult, there is concern among NGOs and developing country governmentsthat global corporate actors such as Monsanto, one of the largest seedcompanies worldwide, will require farmers to purchase their seed and agreeto monitoring of their crops to ensure that they are not retained and used fornext year’s planting (Tancer and Tancer 1999: 906).

In the light of growing concern about the impact of the 1991 version of theUPOV Convention, there have been attempts by the African countries toalleviate the plight of farmers in developing countries by clarify the meaningof sui generis protection within Article 27.3(b) to provide for the continuationof traditional farming practices including the right to exchange and saveseeds (see Tancer and Tancer 1999: 908). Meanwhile, from the perspectiveof global corporate actors, there are indications that the TABD will seek totake steps to encourage developed country governments to reduce theflexibility allowed under Article 27.3(b) during the Doha Development Roundby insisting on more specific reference to the standards provided under the1991 version of UPOV in relation to the types of sui generis protection availablefor plant varieties (see also Durán and Michalopoulos 1999: 864).

World Trade Organisation Members

Although developing countries made little contribution during theformulation of the TRIPs Agreement, save for adopting an early negotiatingstrategy of stating a preference for WIPO over GATT as the most appropriateforum for discussing intellectual property rights (see also Blakeney 2001:


537), as the impact of the TRIPs Agreement has become more widelyunderstood the response from developing countries has become morepronounced. In formulating their response to the TRIPs Agreement,developing countries have, however, to some extent been hindered by anabsence of reliable economic impact assessment (see also Watal 1999: 29)and arguably need a period of reflection now that the transitional period hascome to an end in order to assess the actual implications, as opposed to thepredicted impact discussed in Chapter 5, of the TRIPs Agreement.Nevertheless, developing countries have already begun to complain bitterlythat developed countries have failed to take account of their obligations underArticle 66.2 of the TRIPs Agreement to provide adequate incentives forbusinesses to promote technology transfer to developing nations. Developingcountries have, according to Durán and Michalopoulos (1999: 866), soughtto encourage technology transfer further by including a full review of theeffectiveness of Article 66.2 implementation in any renegotiation of theAgreement.

Applicant countries for WTO membership will also bring freshimplementation problems for the TRIPs Agreement. The People’s Republicof China, for instance, received approval for its application for membershipof the WTO at the Ministerial Meeting in Doha, Qatar, in November 2001.China is almost completely up to speed in legislative terms but still has majorproblems with intellectual property enforcement (see Dessler 1995). TheRussian Federation, which remains an applicant for WTO membership, hasits own problems in relation to legislation giving effect to copyright protectionthat will need to be resolved.

International institutions

International institutions such as the World Health Organization (WHO)have expressed particular concerns about the implications of higher pricesof patented pharmaceutical products (see also Wilder 2001: 526). Theseorganisations, together with NGOs such as Oxfam,13 have campaigned insupport of South African plans to allow parallel imports and compulsorylicensing to ensure access to medicines required locally to combat the HIVvirus. In many respects, this debate on access to essential medicines has cometo typify current anxieties about the impact of the TRIPs Agreement, withsenior policy-makers taking part in seminars on this topic, such as thoseorganised jointly by the WHO and WTO Secretariats in April 2001,14 by theRoyal Institute of International Affairs, London, in July 2001,15 and via specialdiscussions on intellectual property and access to medicines within the TRIPsCouncil in June16 and September 2001.17

Some commentators have sought to encourage debate on whether theWHO or other international institutions can do anything to persuadedeveloped countries and global corporate actors to display a more sensitiveunderstanding of the needs of developing countries (Abbott 2001: 13),


particularly when consumers in those countries are unable to pay the fullprice for proprietary pharmaceutical products (Wooldridge 2000: 111). But,conversely, there are also reports that global corporate actors have sought toexert pressure on international organisations, such as WIPO, the WHO andUNCTAD, with a view to constraining the advice given to developing countriesto that of strict compliance with the TRIPs Agreement (Reichman 1998: 592).

In response to concerns about the implications of higher prices of patentedpharmaceutical products, at the Fourth WTO Ministerial Conference in Doha,Qatar, on 14 November 2001, Members adopted a ‘Declaration on the TRIPsAgreement and Public Health’.18 The Declaration recognised the gravity ofthe public health problems afflicting many developing and least-developedcountries, especially those resulting from HIV/AIDS, tuberculosis, malariaand other epidemics. It stressed the need for the TRIPs Agreement to bepart of the wider national and international action to address these problems.The Declaration recorded the WTO Members’ agreement that TRIPs doesnot and should not prevent measures to protect public health and affirmedthat the TRIPs Agreement should be interpreted and implemented in amanner supportive of WTO Members’ right to protect public health and, inparticular, to promote access to medicines for all.

Accordingly, the Declaration recognised the flexibilities contained in theTRIPs Agreement with respect to the right to grant compulsory licences andthe freedom to determine the grounds upon which such licences are granted;the right of each Member to determine what constitutes a national emergencyor other circumstances of extreme emergency, it being understood that publichealth crises can represent a national emergency or other circumstances ofextreme urgency; and the effect of provisions of the TRIPs Agreement thatallow each Member freedom to establish its own regime for exhaustion ofintellectual property rights, subject to the national treatment and most-favoured-nation treatment provisions of Articles 3 and 4 of the TRIPsAgreement. The Declaration then recognised that WTO Members withinsufficient or no manufacturing capacities in the pharmaceutical sector couldface difficulties in making effective use of compulsory licensing under theTRIPs Agreement and instructed the TRIPs Council to find an expeditioussolution to this problem and to report to the General Council of the WTObefore the end of 2002.

Finally, with particular regard to least-developed (but not developing)countries the Declaration reaffirmed the commitment of developed countriesto provide incentives to their enterprises and institutions to promote andencourage technology transfer to least-developed countries pursuant to Article66.2. Furthermore, under the terms of the Declaration, least-developedcountry Members are not be obliged, with respect to pharmaceutical products,to implement the provisions of the TRIPs Agreement relating to patents(Section 5 of Part II) or the protection of undisclosed information (Section 7of Part II) or to enforce rights provided for under these sections until 1 January2016. This timescale is introduced without prejudice to the right of least-


developed country Members to seek other extensions of the transitionalperiods as provided by Article 66.1.

However, as Abbott (2001: 36) points out, although the MinisterialDeclaration may well be useful as a near-term mechanism for addressingdeveloping and least-developed country concerns, it will not carry the sameweight as the TRIPs Agreement itself in the Dispute Settlement Procedure.In the longer term, negotiating amendments to the TRIPs Agreement duringthe Doha Development Round still remains a distinct possibility.

Limiting the scope of the TRIPs Agreement: the role ofDispute Settlement Panels

Limits to the interpretation of the TRIPs Agreement also appear to havebeen set in relation to the ‘legitimate expectations’ doctrine as interpretedby the Appellate Body in the India–US Mailbox Dispute, discussed in Chapter4. Reichman has been quick to acknowledge that, in the light of the AppellateBody Report on the mailbox dispute, ‘one can no longer argue that activistpanels may fill the gaps in international intellectual property law by referenceto the “legitimate expectations of members and private rights holdersconcerning conditions of competition” ’ (Reichman 1998: 596). The AppellateBody Report appears to confirm that the TRIPs Agreement leaves developingcountries free to introduce laws and policies in relation to intellectual propertyprotection provided these were not expressly harmonized in the TRIPsstandards themselves’ (Reichman 1998: 597). It follows that ‘developedcountries are unlikely to prevail in actions for failure to respect theenforcement procedures of the TRIPs Agreement unless they can show apattern of flagrant violations … because developing countries need not provideforeign rights holders with a better quality of legal product than is availableto their own citizens, which is usually poor by our standards’ (Reichman:1998: 598).19

Prospects for the future: renegotiating the TRIPsAgreement?

Given that any revision of the TRIPs Agreement will take place in the contextof the Doha Development Round of WTO trade negotiations (see also Watal1999: 29), as during the Uruguay Round negotiations intellectual propertyprotection will in all probability be used in trade-offs in other sectors such asagriculture (see also Durán and Michalopoulos 1999: 865). One suggestionhas been that developing countries should ensure that, in a move away fromthe package deals done during the Uruguay Round, any revisions of the TRIPsAgreement should be achieved on their own merits, with no bargaining acrossdiverse trade issues (Gerhart 2000: 312). As net importers of intellectualproperty rights, developing countries should also occupy a negotiating stanceas consumers, not producers, of intellectual property and in doing so form


global alliances with NGOs, consumers, health care representatives andproviders of educational facilities worldwide to devise a coherent and reasonedargument for improved access/lower royalty payments to technology protectedby intellectual property rights.

Developed country priorities

Amendments to the TRIPs Agreement that would be desirable to globalcorporate actors, on the other hand, include tightening up the text, closingloopholes and adding omissions such as pipeline protection. The main issuesfor business interests are undoubtedly transitional periods, enforcementproblems and a willingness to prosecute for non-implementation.

Developed countries, in their communications to the WTO GeneralCouncil in preparation for the 1999 Seattle Ministerial Conference, also madeclear their priorities for further negotiation and/or review of the TRIPsAgreement. The United States20 proposed including the issue of biotechnologypatents and noted that Article 27.3(b) required the review of provisionsallowing Members to exclude plants and animals from patentability for fouryears after the entry into force of the WTO Agreement.

The European Communities21 noted that the ‘built-in agenda’ of TRIPsincluded a review of provisions on geographical indications, including amultinational register for wines, spirits and other products, explicitly statedthat there should be no question of lowering standards or granting furthertransitional periods in any future negotiation of the TRIPs Agreement, notedthat differences between the first-to-file and first-to-invent patent systemsled to unnecessary burdens for inventors, and called for the WTO to buildupon international consensus reached by WIPO in the field of copyright andrelated rights and in the context of the information society. On this last point,intellectual property rights in relation to electronic commerce are not atpresent covered by the TRIPs Agreement (see also Ryan 1998: 199). In 1996WIPO concluded the Copyright Treaty22 (which deals in particular with on-line communications through the internet) and the Performances andPhonograms Treaty.23 The European Communities have subsequently adopteda Directive on copyright in order to implement the WIPO treaties, whereasthe US has introduced the Digital Millennium Copyright Act.24 There havebeen discussions about incorporating these treaties within any future revisionof the TRIPs Agreement.

Japan25 called for full implementation of the TRIPs Agreement and sharedpriorities of the European Communities in relation to patent harmonisationaround the first-to-file system, the need for the TRIPs Agreement to takeaccount of higher levels of protection achieved in other treaties or conventions(presumably the WIPO copyright treaties), and reiterated that anynegotiations should not discuss reducing the current level of protection forintellectual property rights (see also Watal 1999: 6).


Developing country priorities

Many developing countries and those actors, including NGOs, expressingconcerns about the impact of the TRIPs Agreement see the built-in agendaand the opportunity for the TRIPs Council to review the application of theTRIPs Agreement as offering some prospect of renegotiation and relief fromthe costs of compliance. The built-in agenda, it will be recalled, requiredthat a review of Articles 22.1, 23.4, 24.1 and 27.3(b) commence in 1999. Theseprovisions concern unresolved issues from the Uruguay Round negotiationsrelating to geographical indications (Articles 22.1, 23.4 and 24.2) and a reviewof patent protection for plants and animals other than microorganisms andsui generis protection for plant varieties (Article 27.3(b)).26 Moreover, Article71.1 of the Agreement provides for the TRIPs Council to review itsimplementation after the expiry of the 1 January 2000 deadline for the endingof the transitional period for developing countries and every two yearsthereafter (see Article 65.2) (Durán and Michalopoulos 1999: 853).

There are, however, different interpretations of how the review of the built-in agenda should be conducted. Grubb’s (1999: 46) opinion on the review ofArticle 27.3(b), for instance, is that it should be strictly on the narrow issueof whether the exclusion of plants and animals from patentability should beretained in the TRIPs Agreement, although there are concerns thatenvironmental NGOs and some developing countries will use the built-inreview as a ‘foot in the door’ to renegotiate the TRIPs Agreement more widely.Equally, it has been claimed by developing countries that, according to thefirst sentence of Article 71.1, a review of the entire TRIPs Agreement shouldhave been initiated in the year 2000. Grubb (1999: 47) and Blakeney (2001:534), however, interpret the provisions of Article 71.1 merely as referring toa review of TRIPs implementation, since it would make no sense to commencerenegotiation of the Agreement before full implementation has been achievedand its impacts properly assessed.

In relation to sui generis protection, the review of Article 27.3(b) has alreadybegun within the TRIPs Council as part of the built-in agenda of theAgreement. It should be borne in mind that this issue was not settleddefinitively during the Uruguay Round negotiations because of differencesbetween the US and EC positions (see also Watal 1999: 5) rather than becauseof recognition of developing country opposition to the patenting of plantsand animal inventions. Although the United States remains keen onidentifying the UPOV Convention as the reference treaty for theinterpretation of sui generis protection, environmental NGOs, wholly absentfrom the original TRIPs Agreement negotiations, are now activelycampaigning for the whole of Article 27.3 to be deleted (Blakeney 2001: 537)on grounds of morality and ethics. Developed countries are reluctant to re-appraise the status of Article 27.3(b), particularly with the issue still notfully resolved internally within the European Communities (Watal 1999: 9).

Developing countries are also concerned about possible discrepancies


between the UN Convention on Biodiversity (CBD)27 and the TRIPsAgreement. The CBD recognises that nations have sovereignty over biologicalresources and acknowledges the benefits of equitable sharing of any benefitsarising from these resources or from traditional knowledge related tobiological diversity (see also Durán and Michalopoulos 1999: 867). Developingcountries, including India28, Kenya29 and Venezuela,30 have already suggestedthat the TRIPs Agreement should be re-examined to reconcile any differencesbetween TRIPs and the CBD, particularly in relation to Article 27.3(b), inorder to prohibit the granting of patents to those inventions made with foreigngenetic material that are inconsistent with Article 15 of the CBD relating tothe recognition of sovereignty and access to genetic resources (Wilder 2001:521). But although the issues of biodiversity are likely to remain emotive andhigh on the agenda of any debate about revision of the TRIPs Agreement,developed countries are reluctant to re-open the debate in the face of strongpublic campaigns from NGOs.

In other areas, developing countries have sought to use the built-in reviewto their advantage, even when the issues relate primarily to developed countryinterests. Geographical indications, for instance, that were originally includedin the TRIPs Agreement on the insistence of the European Communitiesand Switzerland are now being taken seriously by developing countries aspart of the built-in review as a possible means of protecting regionally specifichandicrafts, foodstuffs and agricultural produce (see also Blakeney 2001: 541).

Likely outcomes

The TRIPs Agreement contains compromises and is imperfect in manyrespects. The nature of some of these compromises is recognised by the built-in agenda for the Agreement. According to Article 27.3(b), for instance, itsprovisions were to be reviewed by the TRIPs Council four years after theentry into force of the Agreement. But there is no consensus on whether thisreview should be with respect to substantive issues or merely implementation.Tancer and Tancer (1999: 904) argue that it would be illogical to haveimplementation as the basis for the review given that developing countrieshad until five years after the entry into force of the Agreement (and tenyears in the case of least-developed countries) before they were required tocomply with its provisions.

The most likely outcome of attempts to revise the TRIPs Agreement isthat, in the medium term, no substantive revision of the TRIPs Agreementwill be made (see also Watal 1999: 29). The Seattle Ministerial of 1999 endedwithout agreement on substantive issues, which remain on the table for futurediscussion, and developed countries remain of the opinion that the provisionsof the TRIPs Agreement should not be tampered with, the focus of any reviewinstead being on enforcement and implementation questions (see also Tancerand Tancer 1999: 892), particularly in the light of findings made by the TRIPsCouncil via the Article 63(2) review procedure (Blakeney 2001: 535) and


Dispute Settlement Panels (see also Watal 1999: 1). The developed countriesdo, however, want to see revisions to the TRIPs Agreement in terms of atightening up of the text. Tim Trainer, President of the Anti-CounterfeitingCoalition, for instance, has predicted (Anon. 1999: 5) that parts of the TRIPsAgreement may have to be looked at again with respect to anti-counterfeitingmeasures, where ambiguities in the language of Articles 51 to 60 on bordermeasures are seen as leading to difficulties in determining the correctinterpretation of the provisions.

Assessment

There is a widespread acknowledgement among corporate actors that, giventhe achievements of the Uruguay Round negotiations with regard tointellectual property protection, it is perhaps churlish to criticise the finaltext of the TRIPs Agreement for its shortcomings. However, it is clear that,in many important respects, the negotiating space that granted globalcorporate actors and developed country governments a relatively ‘free run’during the Uruguay Round has now been occupied by a range of new actorsbringing their own issues, priorities and concerns to the negotiating table.Despite the post-TRIPs initiatives undertaken by the TABD, IPC–UNICEand developed country governments, the window of opportunity that emergedwhen global corporate actors seized the initiative and galvanised a broadrange of interests in support of intellectual property protection during theUruguay Round seems unlikely to be re-opened.

Appendix: full text of theAgreement on Trade-RelatedAspects of Intellectual PropertyRights (the TRIPs Agreement)

Preamble

Members,

Desiring to reduce distortions and impediments to international trade, andtaking into account the need to promote effective and adequate protectionof intellectual property rights, and to ensure that measures and proceduresto enforce intellectual property rights do not themselves become barriers tolegitimate trade;

Recognizing, to this end, the need for new rules and disciplines concerning:

(a) the applicability of the basic principles of GATT 1994 and of relevantinternational intellectual property agreements or conventions;

(b) the provision of adequate standards and principles concerning theavailability, scope and use of trade-related intellectual property rights;

(c) the provision of effective and appropriate means for the enforcement oftrade-related intellectual property rights, taking into account differencesin national legal systems;

(d) the provision of effective and expeditious procedures for the multilateralprevention and settlement of disputes between governments; and

(e) transitional arrangements aiming at the fullest participation in theresults of the negotiations;

Recognizing the need for a multilateral framework of principles, rules anddisciplines dealing with international trade in counterfeit goods;

Recognizing that intellectual property rights are private rights;Recognizing the underlying public policy objectives of national systems for

the protection of intellectual property, including developmental andtechnological objectives;

Recognizing also the special needs of the least-developed country Membersin respect of maximum flexibility in the domestic implementation of lawsand regulations in order to enable them to create a sound and viabletechnological base;

Emphasizing the importance of reducing tensions by reaching strengthened

Appendix 141

commitments to resolve disputes on trade-related intellectual property issuesthrough multilateral procedures;

Desiring to establish a mutually supportive relationship between the WTOand the World Intellectual Property Organization (referred to in thisAgreement as ‘WIPO’) as well as other relevant international organizations;

Hereby agree as follows:

PART I: GENERAL PROVISIONS AND BASIC PRINCIPLES

Article 1

Nature and scope of obligations

1 Members shall give effect to the provisions of this Agreement. Membersmay, but shall not be obliged to, implement in their law more extensiveprotection than is required by this Agreement, provided that suchprotection does not contravene the provisions of this Agreement.Members shall be free to determine the appropriate method ofimplementing the provisions of this Agreement within their own legalsystem and practice.

2 For the purposes of this Agreement, the term ‘intellectual property’ refersto all categories of intellectual property that are the subject of Sections1 through 7 of Part II.

3 Members shall accord the treatment provided for in this Agreement tothe nationals of other Members.1 In respect of the relevant intellectualproperty right, the nationals of other Members shall be understood asthose natural or legal persons that would meet the criteria for eligibilityfor protection provided for in the Paris Convention (1967), the BerneConvention (1971), the Rome Convention and the Treaty on IntellectualProperty in Respect of Integrated Circuits, were all Members of the WTOMembers of those conventions.2 Any Member availing itself of thepossibilities provided in paragraph 3 of Article 5 or paragraph 2 of Article6 of the Rome Convention shall make a notification as foreseen in thoseprovisions to the Council for Trade-Related Aspects of IntellectualProperty Rights (the ‘Council for TRIPs’).

Article 2

Intellectual property conventions

1 In respect of Parts II, III and IV of this Agreement, Members shall complywith Articles 1 through 12, and Article 19, of the Paris Convention (1967).

2 Nothing in Parts I to IV of this Agreement shall derogate from existingobligations that Members may have to each other under the ParisConvention, the Berne Convention, the Rome Convention and the Treatyon Intellectual Property in Respect of Integrated Circuits.

142 Appendix

Article 3

National treatment

1 Each Member shall accord to the nationals of other Members treatmentno less favourable than that it accords to its own nationals with regard tothe protection3 of intellectual property, subject to the exceptions alreadyprovided in, respectively, the Paris Convention (1967), the BerneConvention (1971), the Rome Convention or the Treaty on IntellectualProperty in Respect of Integrated Circuits. In respect of performers,producers of phonograms and broadcasting organizations, this obligationonly applies in respect of the rights provided under this Agreement. AnyMember availing itself of the possibilities provided in Article 6 of theBerne Convention (1971) or paragraph 1(b) of Article 16 of the RomeConvention shall make a notification as foreseen in those provisions tothe Council for TRIPs.

2 Members may avail themselves of the exceptions permitted underparagraph 1 in relation to judicial and administrative procedures,including the designation of an address for service or the appointmentof an agent within the jurisdiction of a Member, only where suchexceptions are necessary to secure compliance with laws and regulationswhich are not inconsistent with the provisions of this Agreement andwhere such practices are not applied in a manner which would constitutea disguised restriction on trade.

Article 4

Most-favoured-nation treatment

With regard to the protection of intellectual property, any advantage, favour,privilege or immunity granted by a Member to the nationals of any othercountry shall be accorded immediately and unconditionally to the nationalsof all other Members. Exempted from this obligation are any advantage,favour, privilege or immunity accorded by a Member:

(a) deriving from international agreements on judicial assistance or lawenforcement of a general nature and not particularly confined to theprotection of intellectual property;

(b) granted in accordance with the provisions of the Berne Convention (1971)or the Rome Convention authorizing that the treatment accorded be afunction not of national treatment but of the treatment accorded inanother country;

(c) in respect of the rights of performers, producers of phonograms andbroadcasting organizations not provided under this Agreement;

(d) deriving from international agreements related to the protection ofintellectual property which entered into force prior to the entry into force

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of the WTO Agreement, provided that such agreements are notified tothe Council for TRIPs and do not constitute an arbitrary or unjustifiablediscrimination against nationals of other Members.

Article 5

Multilateral agreements on acquisition or maintenance of protection

The obligations under Articles 3 and 4 do not apply to procedures providedin multilateral agreements concluded under the auspices of WIPO relatingto the acquisition or maintenance of intellectual property rights.

Article 6

Exhaustion

For the purposes of dispute settlement under this Agreement, subject to theprovisions of Articles 3 and 4 nothing in this Agreement shall be used toaddress the issue of the exhaustion of intellectual property rights.

Article 7

Objectives

The protection and enforcement of intellectual property rights shouldcontribute to the promotion of technological innovation and to the transferand dissemination of technology, to the mutual advantage of producers andusers of technological knowledge and in a manner conducive to social andeconomic welfare, and to a balance of rights and obligations.

Article 8

Principles

1 Members may, in formulating or amending their laws and regulations,adopt measures necessary to protect public health and nutrition, and topromote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measuresare consistent with the provisions of this Agreement.

2 Appropriate measures, provided that they are consistent with theprovisions of this Agreement, may be needed to prevent the abuse ofintellectual property rights by right holders or the resort to practiceswhich unreasonably restrain trade or adversely affect the internationaltransfer of technology.

144 Appendix

PART II: STANDARDS CONCERNING THE AVAILABILITY,SCOPE AND USE OF INTELLECTUAL PROPERTY RIGHTS

Section 1: copyright and related rights

Article 9

Relation to the Berne Convention

1 Members shall comply with Articles 1 through 21 of the Berne Convention(1971) and the Appendix thereto. However, Members shall not have rightsor obligations under this Agreement in respect of the rights conferredunder Article 6bis of that Convention or of the rights derived therefrom.

2 Copyright protection shall extend to expressions and not to ideas,procedures, methods of operation or mathematical concepts as such.

Article 10

Computer programs and compilations of data

1 Computer programs, whether in source or object code, shall be protectedas literary works under the Berne Convention (1971).

2 Compilations of data or other material, whether in machine readable orother form, which by reason of the selection or arrangement of theircontents constitute intellectual creations shall be protected as such. Suchprotection, which shall not extend to the data or material itself, shall bewithout prejudice to any copyright subsisting in the data or materialitself.

Article 11

Rental rights

In respect of at least computer programs and cinematographic works, aMember shall provide authors and their successors in title the right toauthorize or to prohibit the commercial rental to the public of originals orcopies of their copyright works. A Member shall be excepted from thisobligation in respect of cinematographic works unless such rental has led towidespread copying of such works which is materially impairing the exclusiveright of reproduction conferred in that Member on authors and theirsuccessors in title. In respect of computer programs, this obligation does notapply to rentals where the program itself is not the essential object of therental.

Appendix 145

Article 12

Term of protection

Whenever the term of protection of a work, other than a photographic workor a work of applied art, is calculated on a basis other than the life of a naturalperson, such term shall be no less than 50 years from the end of the calendaryear of authorized publication, or, failing such authorized publication within50 years from the making of the work, 50 years from the end of the calendaryear of making.

Article 13

Limitations and exceptions

Members shall confine limitations or exceptions to exclusive rights to certainspecial cases which do not conflict with a normal exploitation of the workand do not unreasonably prejudice the legitimate interests of the right holder.

Article 14

Protection of performers, producers of phonograms (sound recordings) andbroadcasting organizations

1 In respect of a fixation of their performance on a phonogram, performersshall have the possibility of preventing the following acts when undertakenwithout their authorization: the fixation of their unfixed performanceand the reproduction of such fixation. Performers shall also have thepossibility of preventing the following acts when undertaken withouttheir authorization: the broadcasting by wireless means and thecommunication to the public of their live performance.

2 Producers of phonograms shall enjoy the right to authorize or prohibitthe direct or indirect reproduction of their phonograms.

3 Broadcasting organizations shall have the right to prohibit the followingacts when undertaken without their authorization: the fixation, thereproduction of fixations, and the rebroadcasting by wireless means ofbroadcasts, as well as the communication to the public of televisionbroadcasts of the same. Where Members do not grant such rights tobroadcasting organizations, they shall provide owners of copyright in thesubject matter of broadcasts with the possibility of preventing the aboveacts, subject to the provisions of the Berne Convention (1971).

4 The provisions of Article 11 in respect of computer programs shall applymutatis mutandis to producers of phonograms and any other right holdersin phonograms as determined in a Member’s law. If on 15 April 1994 aMember has in force a system of equitable remuneration of right holders

146 Appendix

in respect of the rental of phonograms, it may maintain such systemprovided that the commercial rental of phonograms is not giving rise tothe material impairment of the exclusive rights of reproduction of rightholders.

5 The term of the protection available under this Agreement to performersand producers of phonograms shall last at least until the end of a periodof 50 years computed from the end of the calendar year in which thefixation was made or the performance took place. The term of protectiongranted pursuant to paragraph 3 shall last for at least 20 years from theend of the calendar year in which the broadcast took place.

6 Any Member may, in relation to the rights conferred under paragraphs1, 2 and 3, provide for conditions, limitations, exceptions and reservationsto the extent permitted by the Rome Convention. However, the provisionsof Article 18 of the Berne Convention (1971) shall also apply, mutatismutandis, to the rights of performers and producers of phonograms inphonograms.

Section 2: trademarks

Article 15

Protectable subject matter

1 Any sign, or any combination of signs, capable of distinguishing the goodsor services of one undertaking from those of other undertakings, shallbe capable of constituting a trademark. Such signs, in particular wordsincluding personal names, letters, numerals, figurative elements andcombinations of colours as well as any combination of such signs, shallbe eligible for registration as trademarks. Where signs are not inherentlycapable of distinguishing the relevant goods or services, Members maymake registrability depend on distinctiveness acquired through use.Members may require, as a condition of registration, that signs be visuallyperceptible.

2 Paragraph 1 shall not be understood to prevent a Member from denyingregistration of a trademark on other grounds, provided that they do notderogate from the provisions of the Paris Convention (1967).

3 Members may make registrability depend on use. However, actual use ofa trademark shall not be a condition for filing an application forregistration. An application shall not be refused solely on the groundthat intended use has not taken place before the expiry of a period ofthree years from the date of application.

4 The nature of the goods or services to which a trademark is to be appliedshall in no case form an obstacle to registration of the trademark.

5 Members shall publish each trademark either before it is registered orpromptly after it is registered and shall afford a reasonable opportunity

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for petitions to cancel the registration. In addition, Members may affordan opportunity for the registration of a trademark to be opposed.

Article 16

Rights conferred

1 The owner of a registered trademark shall have the exclusive right toprevent all third parties not having the owner’s consent from using inthe course of trade identical or similar signs for goods or services whichare identical or similar to those in respect of which the trademark isregistered where such use would result in a likelihood of confusion. Incase of the use of an identical sign for identical goods or services, alikelihood of confusion shall be presumed. The rights described aboveshall not prejudice any existing prior rights, nor shall they affect thepossibility of Members making rights available on the basis of use.

2 Article 6bis of the Paris Convention (1967) shall apply, mutatis mutandis,to services. In determining whether a trademark is well-known, Membersshall take account of the knowledge of the trademark in the relevantsector of the public, including knowledge in the Member concerned whichhas been obtained as a result of the promotion of the trademark.

3 Article 6bis of the Paris Convention (1967) shall apply, mutatis mutandis,to goods or services which are not similar to those in respect of which atrademark is registered, provided that use of that trademark in relationto those goods or services would indicate a connection between thosegoods or services and the owner of the registered trademark and providedthat the interests of the owner of the registered trademark are likely tobe damaged by such use.

Article 17

Exceptions

Members may provide limited exceptions to the rights conferred by atrademark, such as fair use of descriptive terms, provided that such exceptionstake account of the legitimate interests of the owner of the trademark and ofthird parties.

Article 18

Term of protection

Initial registration, and each renewal of registration, of a trademark shall befor a term of no less than seven years. The registration of a trademark shallbe renewable indefinitely.

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Article 19

Requirement of use

1 If use is required to maintain a registration, the registration may becancelled only after an uninterrupted period of at least three years ofnon-use, unless valid reasons based on the existence of obstacles to suchuse are shown by the trademark owner. Circumstances arisingindependently of the will of the owner of the trademark which constitutean obstacle to the use of the trademark, such as import restrictions on orother government requirements for goods or services protected by thetrademark, shall be recognized as valid reasons for non-use.

2 When subject to the control of its owner, use of a trademark by anotherperson shall be recognized as use of the trademark for the purpose ofmaintaining the registration.

Article 20

Other requirements

The use of a trademark in the course of trade shall not be unjustifiablyencumbered by special requirements, such as use with another trademark,use in a special form or use in a manner detrimental to its capability todistinguish the goods or services of one undertaking from those of otherundertakings. This will not preclude a requirement prescribing the use ofthe trademark identifying the undertaking producing the goods or servicesalong with, but without linking it to, the trademark distinguishing the specificgoods or services in question of that undertaking.

Article 21

Licensing and assignment

Members may determine conditions on the licensing and assignment oftrademarks, it being understood that the compulsory licensing of trademarksshall not be permitted and that the owner of a registered trademark shallhave the right to assign the trademark with or without the transfer of thebusiness to which the trademark belongs.

Section 3: geographical indications

Article 22

Protection of geographical indications

1 Geographical indications are, for the purposes of this Agreement,

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indications which identify a good as originating in the territory of aMember, or a region or locality in that territory, where a given quality,reputation or other characteristic of the good is essentially attributableto its geographical origin.

2 In respect of geographical indications, Members shall provide the legalmeans for interested parties to prevent:

(a) the use of any means in the designation or presentation of a goodthat indicates or suggests that the good in question originates in ageographical area other than the true place of origin in a mannerwhich misleads the public as to the geographical origin of the good;

(b) any use which constitutes an act of unfair competition within themeaning of Article 10bis of the Paris Convention (1967).

3 A Member shall, ex officio if its legislation so permits or at the request ofan interested party, refuse or invalidate the registration of a trademarkwhich contains or consists of a geographical indication with respect togoods not originating in the territory indicated, if use of the indicationin the trademark for such goods in that Member is of such a nature as tomislead the public as to the true place of origin.

4 The protection under paragraphs 1, 2 and 3 shall be applicable against ageographical indication which, although literally true as to the territory,region or locality in which the goods originate, falsely represents to thepublic that the goods originate in another territory.

Article 23

Additional protection for geographical indications for wines and spirits

1 Each Member shall provide the legal means for interested parties toprevent use of a geographical indication identifying wines for wines notoriginating in the place indicated by the geographical indication inquestion or identifying spirits for spirits not originating in the placeindicated by the geographical indication in question, even where the trueorigin of the goods is indicated or the geographical indication is used intranslation or accompanied by expressions such as ‘kind’, ‘type’, ‘style’,‘imitation’ or the like.4

2 The registration of a trademark for wines which contains or consists of ageographical indication identifying wines or for spirits which contains orconsists of a geographical indication identifying spirits shall be refusedor invalidated, ex officio if a Member’s legislation so permits or at therequest of an interested party, with respect to such wines or spirits nothaving this origin.

3 In the case of homonymous geographical indications for wines, protectionshall be accorded to each indication, subject to the provisions of paragraph

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4 of Article 22. Each Member shall determine the practical conditionsunder which the homonymous indications in question will bedifferentiated from each other, taking into account the need to ensureequitable treatment of the producers concerned and that consumers arenot misled.

4 In order to facilitate the protection of geographical indications for wines,negotiations shall be undertaken in the Council for TRIPs concerningthe establishment of a multilateral system of notification and registrationof geographical indications for wines eligible for protection in thoseMembers participating in the system.

Article 24

International negotiations: exceptions

1 Members agree to enter into negotiations aimed at increasing theprotection of individual geographical indications under Article 23. Theprovisions of paragraphs 4 through 8 below shall not be used by a Memberto refuse to conduct negotiations or to conclude bilateral or multilateralagreements. In the context of such negotiations, Members shall be willingto consider the continued applicability of these provisions to individualgeographical indications whose use was the subject of such negotiations.

2 The Council for TRIPs shall keep under review the application of theprovisions of this Section; the first such review shall take place withintwo years of the entry into force of the WTO Agreement. Any matteraffecting the compliance with the obligations under these provisions maybe drawn to the attention of the Council, which, at the request of aMember, shall consult with any Member or Members in respect of suchmatter in respect of which it has not been possible to find a satisfactorysolution through bilateral or plurilateral consultations between theMembers concerned. The Council shall take such action as may be agreedto facilitate the operation and further the objectives of this Section.

3 In implementing this Section, a Member shall not diminish the protectionof geographical indications that existed in that Member immediatelyprior to the date of entry into force of the WTO Agreement.

4 Nothing in this Section shall require a Member to prevent continuedand similar use of a particular geographical indication of another Memberidentifying wines or spirits in connection with goods or services by any ofits nationals or domiciliaries who have used that geographical indicationin a continuous manner with regard to the same or related goods orservices in the territory of that Member either (a) for at least 10 yearspreceding 15 April 1994 or (b) in good faith preceding that date.

5 Where a trademark has been applied for or registered in good faith, orwhere rights to a trademark have been acquired through use in goodfaith either:

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(a) before the date of application of these provisions in that Member asdefined in Part VI; or

(b) before the geographical indication is protected in its country of origin;

measures adopted to implement this Section shall not prejudice eligibilityfor or the validity of the registration of a trademark, or the right to use atrademark, on the basis that such a trademark is identical with, or similarto, a geographical indication.

6 Nothing in this Section shall require a Member to apply its provisions inrespect of a geographical indication of any other Member with respectto goods or services for which the relevant indication is identical withthe term customary in common language as the common name for suchgoods or services in the territory of that Member. Nothing in this Sectionshall require a Member to apply its provisions in respect of a geographicalindication of any other Member with respect to products of the vine forwhich the relevant indication is identical with the customary name of agrape variety existing in the territory of that Member as of the date ofentry into force of the WTO Agreement.

7 A Member may provide that any request made under this Section inconnection with the use or registration of a trademark must be presentedwithin five years after the adverse use of the protected indication hasbecome generally known in that Member or after the date of registrationof the trademark in that Member provided that the trademark has beenpublished by that date, if such date is earlier than the date on which theadverse use became generally known in that Member, provided that thegeographical indication is not used or registered in bad faith.

8 The provisions of this Section shall in no way prejudice the right of anyperson to use, in the course of trade, that person’s name or the name ofthat person’s predecessor in business, except where such name is used insuch a manner as to mislead the public.

9 There shall be no obligation under this Agreement to protect geographicalindications which are not or cease to be protected in their country oforigin, or which have fallen into disuse in that country.

Section 4: industrial designs

Article 25

Requirements for protection

1 Members shall provide for the protection of independently createdindustrial designs that are new or original. Members may provide thatdesigns are not new or original if they do not significantly differ fromknown designs or combinations of known design features. Members mayprovide that such protection shall not extend to designs dictatedessentially by technical or functional considerations.

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2 Each Member shall ensure that requirements for securing protectionfor textile designs, in particular in regard to any cost, examination orpublication, do not unreasonably impair the opportunity to seek andobtain such protection. Members shall be free to meet this obligationthrough industrial design law or through copyright law.

Article 26

Protection

1 The owner of a protected industrial design shall have the right to preventthird parties not having the owner’s consent from making, selling orimporting articles bearing or embodying a design which is a copy, orsubstantially a copy, of the protected design, when such acts areundertaken for commercial purposes.

2 Members may provide limited exceptions to the protection of industrialdesigns, provided that such exceptions do not unreasonably conflict withthe normal exploitation of protected industrial designs and do notunreasonably prejudice the legitimate interests of the owner of theprotected design, taking account of the legitimate interests of thirdparties.

3 The duration of protection available shall amount to at least 10 years.

Section 5: patents

Article 27

Patentable subject matter

1 Subject to the provisions of paragraphs 2 and 3, patents shall be availablefor any inventions, whether products or processes, in all fields oftechnology, provided that they are new, involve an inventive step and arecapable of industrial application.5 Subject to paragraph 4 of Article 65,paragraph 8 of Article 70 and paragraph 3 of this Article, patents shallbe available and patent rights enjoyable without discrimination as tothe place of invention, the field of technology and whether products areimported or locally produced.

2 Members may exclude from patentability inventions, the preventionwithin their territory of the commercial exploitation of which is necessaryto protect ordre public or morality, including to protect human, animal orplant life or health or to avoid serious prejudice to the environment,provided that such exclusion is not made merely because the exploitationis prohibited by their law.

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3 Members may also exclude from patentability:

(a) diagnostic, therapeutic and surgical methods for the treatment ofhumans or animals;

(b) plants and animals other than micro-organisms, and essentiallybiological processes for the production of plants or animals otherthan non-biological and microbiological processes. However,Members shall provide for the protection of plant varieties either bypatents or by an effective sui generis system or by any combinationthereof. The provisions of this subparagraph shall be reviewed fouryears after the date of entry into force of the WTO Agreement.

Article 28

Rights conferred

1 A patent shall confer on its owner the following exclusive rights:

(a) where the subject matter of a patent is a product, to prevent thirdparties not having the owner’s consent from the acts of: making,using, offering for sale, selling, or importing6 for these purposes thatproduct;

(b) where the subject matter of a patent is a process, to prevent thirdparties not having the owner’s consent from the act of using theprocess, and from the acts of: using, offering for sale, selling, orimporting for these purposes at least the product obtained directlyby that process.

2 Patent owners shall also have the right to assign, or transfer by succession,the patent and to conclude licensing contracts.

Article 29

Conditions on patent applicants

1 Members shall require that an applicant for a patent shall disclose theinvention in a manner sufficiently clear and complete for the inventionto be carried out by a person skilled in the art and may require theapplicant to indicate the best mode for carrying out the invention knownto the inventor at the filing date or, where priority is claimed, at thepriority date of the application.

2 Members may require an applicant for a patent to provide informationconcerning the applicant’s corresponding foreign applications and grants.

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Article 30

Exceptions to rights conferred

Members may provide limited exceptions to the exclusive rights conferredby a patent, provided that such exceptions do not unreasonably conflict witha normal exploitation of the patent and do not unreasonably prejudice thelegitimate interests of the patent owner, taking account of the legitimateinterests of third parties.

Article 31

Other use without authorization of the right holder

Where the law of a Member allows for other use7 of the subject matter of apatent without the authorization of the right holder, including use by thegovernment or third parties authorized by the government, the followingprovisions shall be respected:

(a) authorization of such use shall be considered on its individual merits;(b) such use may only be permitted if, prior to such use, the proposed user

has made efforts to obtain authorization from the right holder onreasonable commercial terms and conditions and that such efforts havenot been successful within a reasonable period of time. This requirementmay be waived by a Member in the case of a national emergency or othercircumstances of extreme urgency or in cases of public non-commercialuse. In situations of national emergency or other circumstances ofextreme urgency, the right holder shall, nevertheless, be notified as soonas reasonably practicable. In the case of public non-commercial use, wherethe government or contractor, without making a patent search, knows orhas demonstrable grounds to know that a valid patent is or will be usedby or for the government, the right holder shall be informed promptly;

(c) the scope and duration of such use shall be limited to the purpose forwhich it was authorized, and in the case of semi-conductor technologyshall only be for public non-commercial use or to remedy a practicedetermined after judicial or administrative process to be anti-competitive;

(d) such use shall be non-exclusive;(e) such use shall be non-assignable, except with that part of the enterprise

or goodwill which enjoys such use;(f) any such use shall be authorized predominantly for the supply of the

domestic market of the Member authorizing such use;(g) authorization for such use shall be liable, subject to adequate protection

of the legitimate interests of the persons so authorized, to be terminatedif and when the circumstances which led to it cease to exist and areunlikely to recur. The competent authority shall have the authority to

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review, upon motivated request, the continued existence of thesecircumstances;

(h) the right holder shall be paid adequate remuneration in thecircumstances of each case, taking into account the economic value ofthe authorization;

(i) the legal validity of any decision relating to the authorization of such useshall be subject to judicial review or other independent review by a distincthigher authority in that Member;

(j) any decision relating to the remuneration provided in respect of suchuse shall be subject to judicial review or other independent review by adistinct higher authority in that Member;

(k) Members are not obliged to apply the conditions set forth insubparagraphs (b) and (f) where such use is permitted to remedy apractice determined after judicial or administrative process to be anti-competitive. The need to correct anti-competitive practices may be takeninto account in determining the amount of remuneration in such cases.Competent authorities shall have the authority to refuse termination ofauthorization if and when the conditions which led to such authorizationare likely to recur;

(l) where such use is authorized to permit the exploitation of a patent (‘thesecond patent’) which cannot be exploited without infringing anotherpatent (‘the first patent’), the following additional conditions shall apply:

(i) the invention claimed in the second patent shall involve an importanttechnical advance of considerable economic significance in relationto the invention claimed in the first patent;

(ii) the owner of the first patent shall be entitled to a cross-licence onreasonable terms to use the invention claimed in the second patent;and

(iii) the use authorized in respect of the first patent shall be non-assignable except with the assignment of the second patent.

Article 32

Revocation/forfeiture

An opportunity for judicial review of any decision to revoke or forfeit a patentshall be available.

Article 33

Term of protection

The term of protection available shall not end before the expiration of aperiod of twenty years counted from the filing date.8

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Article 34

Process patents: burden of proof

1 For the purposes of civil proceedings in respect of the infringement ofthe rights of the owner referred to in paragraph 1(b) of Article 28, if thesubject matter of a patent is a process for obtaining a product, the judicialauthorities shall have the authority to order the defendant to prove thatthe process to obtain an identical product is different from the patentedprocess. Therefore, Members shall provide, in at least one of the followingcircumstances, that any identical product when produced without theconsent of the patent owner shall, in the absence of proof to the contrary,be deemed to have been obtained by the patented process:

(a) if the product obtained by the patented process is new;(b) if there is a substantial likelihood that the identical product was

made by the process and the owner of the patent has been unablethrough reasonable efforts to determine the process actually used.

2 Any Member shall be free to provide that the burden of proof indicatedin paragraph 1 shall be on the alleged infringer only if the conditionreferred to in subparagraph (a) is fulfilled or only if the condition referredto in subparagraph (b) is fulfilled.

3 In the adduction of proof to the contrary, the legitimate interests ofdefendants in protecting their manufacturing and business secrets shallbe taken into account.

Section 6: layout-designs (topographies) of integratedcircuits

Article 35

Relation to the IPIC Treaty

Members agree to provide protection to the layout-designs (topographies) ofintegrated circuits (referred to in this Agreement as ‘layout-designs’) inaccordance with Articles 2 through 7 (other than paragraph 3 of Article 6),Article 12 and paragraph 3 of Article 16 of the Treaty on Intellectual Propertyin Respect of Integrated Circuits and, in addition, to comply with the followingprovisions.

Article 36

Scope of the protection

Subject to the provisions of paragraph 1 of Article 37, Members shall consider

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unlawful the following acts if performed without the authorization of theright holder:9 importing, selling, or otherwise distributing for commercialpurposes a protected layout-design, an integrated circuit in which a protectedlayout-design is incorporated, or an article incorporating such an integratedcircuit only in so far as it continues to contain an unlawfully reproduced layout-design.

Article 37

Acts not requiring the authorization of the right holder

1 Notwithstanding Article 36, no Member shall consider unlawful theperformance of any of the acts referred to in that Article in respect of anintegrated circuit incorporating an unlawfully reproduced layout-designor any article incorporating such an integrated circuit where the personperforming or ordering such acts did not know and had no reasonableground to know, when acquiring the integrated circuit or articleincorporating such an integrated circuit, that it incorporated anunlawfully reproduced layout-design. Members shall provide that, afterthe time that such person has received sufficient notice that the layout-design was unlawfully reproduced, that person may perform any of theacts with respect to the stock on hand or ordered before such time, butshall be liable to pay to the right holder a sum equivalent to a reasonableroyalty such as would be payable under a freely negotiated licence inrespect of such a layout-design.

2 The conditions set out in subparagraphs (a) through (k) of Article 31shall apply mutatis mutandis in the event of any non-voluntary licensing ofa layout-design or of its use by or for the government without theauthorization of the right holder.

Article 38

Term of protection

1 In Members requiring registration as a condition of protection, the termof protection of layout-designs shall not end before the expiration of aperiod of 10 years counted from the date of filing an application forregistration or from the first commercial exploitation wherever in theworld it occurs.

2 In Members not requiring registration as a condition for protection,layout-designs shall be protected for a term of no less than 10 years fromthe date of the first commercial exploitation wherever in the world itoccurs.

3 Notwithstanding paragraphs 1 and 2, a Member may provide thatprotection shall lapse 15 years after the creation of the layout-design.

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Section 7: protection of undisclosed information

Article 39

1 In the course of ensuring effective protection against unfair competitionas provided in Article 10bis of the Paris Convention (1967), Membersshall protect undisclosed information in accordance with paragraph 2and data submitted to governments or governmental agencies inaccordance with paragraph 3.

2 Natural and legal persons shall have the possibility of preventinginformation lawfully within their control from being disclosed to, acquiredby, or used by others without their consent in a manner contrary to honestcommercial practices10 so long as such information:

(a) is secret in the sense that it is not, as a body or in the preciseconfiguration and assembly of its components, generally knownamong or readily accessible to persons within the circles that normallydeal with the kind of information in question;

(b) has commercial value because it is secret; and(c) has been subject to reasonable steps under the circumstances, by

the person lawfully in control of the information, to keep it secret.

3 Members, when requiring, as a condition of approving the marketing ofpharmaceutical or of agricultural chemical products which utilize newchemical entities, the submission of undisclosed test or other data, theorigination of which involves a considerable effort, shall protect suchdata against unfair commercial use. In addition, Members shall protectsuch data against disclosure, except where necessary to protect the public,or unless steps are taken to ensure that the data are protected againstunfair commercial use.

Section 8: control of anti-competitive practices incontractual licences

Article 40

1 Members agree that some licensing practices or conditions pertainingto intellectual property rights which restrain competition may haveadverse effects on trade and may impede the transfer and disseminationof technology.

2 Nothing in this Agreement shall prevent Members from specifying intheir legislation licensing practices or conditions that may in particularcases constitute an abuse of intellectual property rights having an adverseeffect on competition in the relevant market. As provided above, aMember may adopt, consistently with the other provisions of this

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Agreement, appropriate measures to prevent or control such practices,which may include for example exclusive grantback conditions, conditionspreventing challenges to validity and coercive package licensing, in thelight of the relevant laws and regulations of that Member.

3 Each Member shall enter, upon request, into consultations with any otherMember which has cause to believe that an intellectual property rightowner that is a national or domiciliary of the Member to which the requestfor consultations has been addressed is undertaking practices in violationof the requesting Member’s laws and regulations on the subject matterof this Section, and which wishes to secure compliance with suchlegislation, without prejudice to any action under the law and to the fullfreedom of an ultimate decision of either Member. The Memberaddressed shall accord full and sympathetic consideration to, and shallafford adequate opportunity for, consultations with the requestingMember, and shall cooperate through supply of publicly available non-confidential information of relevance to the matter in question and ofother information available to the Member, subject to domestic law andto the conclusion of mutually satisfactory agreements concerning thesafeguarding of its confidentiality by the requesting Member.

4 A Member whose nationals or domiciliaries are subject to proceedingsin another Member concerning alleged violation of that other Member’slaws and regulations on the subject matter of this Section shall, uponrequest, be granted an opportunity for consultations by the other Memberunder the same conditions as those foreseen in paragraph 3.

PART III: ENFORCEMENT OF INTELLECTUAL PROPERTYRIGHTS

Section 1: general obligations

Article 41

1 Members shall ensure that enforcement procedures as specified in thisPart are available under their law so as to permit effective action againstany act of infringement of intellectual property rights covered by thisAgreement, including expeditious remedies to prevent infringementsand remedies which constitute a deterrent to further infringements.These procedures shall be applied in such a manner as to avoid thecreation of barriers to legitimate trade and to provide for safeguardsagainst their abuse.

2 Procedures concerning the enforcement of intellectual property rightsshall be fair and equitable. They shall not be unnecessarily complicatedor costly, or entail unreasonable time-limits or unwarranted delays.

3 Decisions on the merits of a case shall preferably be in writing andreasoned. They shall be made available at least to the parties to the

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proceeding without undue delay. Decisions on the merits of a case shallbe based only on evidence in respect of which parties were offered theopportunity to be heard.

4 Parties to a proceeding shall have an opportunity for review by a judicialauthority of final administrative decisions and, subject to jurisdictionalprovisions in a Member’s law concerning the importance of a case, of atleast the legal aspects of initial judicial decisions on the merits of a case.However, there shall be no obligation to provide an opportunity for reviewof acquittals in criminal cases.

5 It is understood that this Part does not create any obligation to put inplace a judicial system for the enforcement of intellectual property rightsdistinct from that for the enforcement of law in general, nor does it affectthe capacity of Members to enforce their law in general. Nothing in thisPart creates any obligation with respect to the distribution of resourcesas between enforcement of intellectual property rights and theenforcement of law in general.

Section 2: civil and administrative procedures andremedies

Article 42

Fair and equitable procedures

Members shall make available to right holders11 civil judicial proceduresconcerning the enforcement of any intellectual property right covered bythis Agreement. Defendants shall have the right to written notice which istimely and contains sufficient detail, including the basis of the claims. Partiesshall be allowed to be represented by independent legal counsel, andprocedures shall not impose overly burdensome requirements concerningmandatory personal appearances. All parties to such procedures shall be dulyentitled to substantiate their claims and to present all relevant evidence.The procedure shall provide a means to identify and protect confidentialinformation, unless this would be contrary to existing constitutionalrequirements.

Article 43

Evidence

1 The judicial authorities shall have the authority, where a party haspresented reasonably available evidence sufficient to support its claimsand has specified evidence relevant to substantiation of its claims whichlies in the control of the opposing party, to order that this evidence beproduced by the opposing party, subject in appropriate cases to conditionswhich ensure the protection of confidential information.

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2 In cases in which a party to a proceeding voluntarily and without goodreason refuses access to, or otherwise does not provide necessaryinformation within a reasonable period, or significantly impedes aprocedure relating to an enforcement action, a Member may accordjudicial authorities the authority to make preliminary and finaldeterminations, affirmative or negative, on the basis of the informationpresented to them, including the complaint or the allegation presentedby the party adversely affected by the denial of access to information,subject to providing the parties an opportunity to be heard on theallegations or evidence.

Article 44

Injunctions

1 The judicial authorities shall have the authority to order a party to desistfrom an infringement, inter alia, to prevent the entry into the channels ofcommerce in their jurisdiction of imported goods that involve theinfringement of an intellectual property right, immediately after customsclearance of such goods. Members are not obliged to accord such authorityin respect of protected subject matter acquired or ordered by a personprior to knowing or having reasonable grounds to know that dealing insuch subject matter would entail the infringement of an intellectualproperty right.

2 Notwithstanding the other provisions of this Part and provided that theprovisions of Part II specifically addressing use by governments, or bythird parties authorized by a government, without the authorization ofthe right holder are complied with, Members may limit the remediesavailable against such use to payment of remuneration in accordancewith subparagraph (h) of Article 31. In other cases, the remedies underthis Part shall apply or, where these remedies are inconsistent with aMember’s law, declaratory judgments and adequate compensation shallbe available.

Article 45

Damages

1 The judicial authorities shall have the authority to order the infringer topay the right holder damages adequate to compensate for the injury theright holder has suffered because of an infringement of that person’sintellectual property right by an infringer who knowingly, or withreasonable grounds to know, engaged in infringing activity.

2 The judicial authorities shall also have the authority to order the infringerto pay the right holder expenses, which may include appropriateattorney’s fees. In appropriate cases, Members may authorize the judicial

162 Appendix

authorities to order recovery of profits and/or payment of pre-establisheddamages even where the infringer did not knowingly, or with reasonablegrounds to know, engage in infringing activity.

Article 46

Other remedies

In order to create an effective deterrent to infringement, the judicialauthorities shall have the authority to order that goods that they have foundto be infringing be, without compensation of any sort, disposed of outside thechannels of commerce in such a manner as to avoid any harm caused to theright holder, or, unless this would be contrary to existing constitutionalrequirements, destroyed. The judicial authorities shall also have the authorityto order that materials and implements the predominant use of which hasbeen in the creation of the infringing goods be, without compensation of anysort, disposed of outside the channels of commerce in such a manner as tominimize the risks of further infringements. In considering such requests,the need for proportionality between the seriousness of the infringementand the remedies ordered as well as the interests of third parties shall betaken into account. In regard to counterfeit trademark goods, the simpleremoval of the trademark unlawfully affixed shall not be sufficient, otherthan in exceptional cases, to permit release of the goods into the channels ofcommerce.

Article 47

Right of information

Members may provide that the judicial authorities shall have the authority,unless this would be out of proportion to the seriousness of the infringement,to order the infringer to inform the right holder of the identity of third personsinvolved in the production and distribution of the infringing goods or servicesand of their channels of distribution.

Article 48

Indemnification of the defendant

1 The judicial authorities shall have the authority to order a party at whoserequest measures were taken and who has abused enforcementprocedures to provide to a party wrongfully enjoined or restrainedadequate compensation for the injury suffered because of such abuse.The judicial authorities shall also have the authority to order the applicantto pay the defendant expenses, which may include appropriate attorney’sfees.

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2 In respect of the administration of any law pertaining to the protectionor enforcement of intellectual property rights, Members shall only exemptboth public authorities and officials from liability to appropriate remedialmeasures where actions are taken or intended in good faith in the courseof the administration of that law.

Article 49

Administrative procedures

To the extent that any civil remedy can be ordered as a result of administrativeprocedures on the merits of a case, such procedures shall conform to principlesequivalent in substance to those set forth in this Section.

Section 3: provisional measures

Article 50

1 The judicial authorities shall have the authority to order prompt andeffective provisional measures:

(a) to prevent an infringement of any intellectual property right fromoccurring, and in particular to prevent the entry into the channelsof commerce in their jurisdiction of goods, including imported goodsimmediately after customs clearance;

(b) to preserve relevant evidence in regard to the alleged infringement.

2 The judicial authorities shall have the authority to adopt provisionalmeasures inaudita altera parte where appropriate, in particular where anydelay is likely to cause irreparable harm to the right holder, or wherethere is a demonstrable risk of evidence being destroyed.

3 The judicial authorities shall have the authority to require the applicantto provide any reasonably available evidence in order to satisfy themselveswith a sufficient degree of certainty that the applicant is the right holderand that the applicant’s right is being infringed or that such infringementis imminent, and to order the applicant to provide a security or equivalentassurance sufficient to protect the defendant and to prevent abuse.

4 Where provisional measures have been adopted inaudita altera parte, theparties affected shall be given notice, without delay after the executionof the measures at the latest. A review, including a right to be heard,shall take place upon request of the defendant with a view to deciding,within a reasonable period after the notification of the measures, whetherthese measures shall be modified, revoked or confirmed.

5 The applicant may be required to supply other information necessaryfor the identification of the goods concerned by the authority that willexecute the provisional measures.

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6 Without prejudice to paragraph 4, provisional measures taken on thebasis of paragraphs 1 and 2 shall, upon request by the defendant, berevoked or otherwise cease to have effect, if proceedings leading to adecision on the merits of the case are not initiated within a reasonableperiod, to be determined by the judicial authority ordering the measureswhere a Member’s law so permits or, in the absence of such adetermination, not to exceed 20 working days or 31 calendar days,whichever is the longer.

7 Where the provisional measures are revoked or where they lapse due toany act or omission by the applicant, or where it is subsequently foundthat there has been no infringement or threat of infringement of anintellectual property right, the judicial authorities shall have the authorityto order the applicant, upon request of the defendant, to provide thedefendant appropriate compensation for any injury caused by thesemeasures.

8 To the extent that any provisional measure can be ordered as a result ofadministrative procedures, such procedures shall conform to principlesequivalent in substance to those set forth in this Section.

Section 4: special requirements related to bordermeasures12

Article 51

Suspension of release by customs authorities

Members shall, in conformity with the provisions set out below, adoptprocedures13 to enable a right holder, who has valid grounds for suspectingthat the importation of counterfeit trademark or pirated copyright goods14

may take place, to lodge an application in writing with competent authorities,administrative or judicial, for the suspension by the customs authorities ofthe release into free circulation of such goods. Members may enable such anapplication to be made in respect of goods which involve other infringementsof intellectual property rights, provided that the requirements of this Sectionare met. Members may also provide for corresponding procedures concerningthe suspension by the customs authorities of the release of infringing goodsdestined for exportation from their territories.

Article 52

Application

Any right holder initiating the procedures under Article 51 shall be requiredto provide adequate evidence to satisfy the competent authorities that, underthe laws of the country of importation, there is prima facie an infringement

Appendix 165

of the right holder’s intellectual property right and to supply a sufficientlydetailed description of the goods to make them readily recognizable by thecustoms authorities. The competent authorities shall inform the applicantwithin a reasonable period whether they have accepted the application and,where determined by the competent authorities, the period for which thecustoms authorities will take action.

Article 53

Security or equivalent assurance

1 The competent authorities shall have the authority to require anapplicant to provide a security or equivalent assurance sufficient toprotect the defendant and the competent authorities and to preventabuse. Such security or equivalent assurance shall not unreasonably deterrecourse to these procedures.

2 Where pursuant to an application under this Section the release of goodsinvolving industrial designs, patents, layout-designs or undisclosedinformation into free circulation has been suspended by customsauthorities on the basis of a decision other than by a judicial or otherindependent authority, and the period provided for in Article 55 hasexpired without the granting of provisional relief by the duly empoweredauthority, and provided that all other conditions for importation havebeen complied with, the owner, importer, or consignee of such goods shallbe entitled to their release on the posting of a security in an amountsufficient to protect the right holder for any infringement. Payment ofsuch security shall not prejudice any other remedy available to the rightholder, it being understood that the security shall be released if the rightholder fails to pursue the right of action within a reasonable period oftime.

Article 54

Notice of suspension

The importer and the applicant shall be promptly notified of the suspensionof the release of goods according to Article 51.

Article 55

Duration of suspension

If, within a period not exceeding 10 working days after the applicant hasbeen served notice of the suspension, the customs authorities have not beeninformed that proceedings leading to a decision on the merits of the case

166 Appendix

have been initiated by a party other than the defendant, or that the dulyempowered authority has taken provisional measures prolonging thesuspension of the release of the goods, the goods shall be released, providedthat all other conditions for importation or exportation have been compliedwith; in appropriate cases, this time-limit may be extended by another 10working days. If proceedings leading to a decision on the merits of the casehave been initiated, a review, including a right to be heard, shall take placeupon request of the defendant with a view to deciding, within a reasonableperiod, whether these measures shall be modified, revoked or confirmed.Notwithstanding the above, where the suspension of the release of goods iscarried out or continued in accordance with a provisional judicial measure,the provisions of paragraph 6 of Article 50 shall apply.

Article 56

Indemnification of the importer and of the owner of the goods

Relevant authorities shall have the authority to order the applicant to paythe importer, the consignee and the owner of the goods appropriatecompensation for any injury caused to them through the wrongful detentionof goods or through the detention of goods released pursuant to Article 55.

Article 57

Right of inspection and information

Without prejudice to the protection of confidential information, Membersshall provide the competent authorities the authority to give the right holdersufficient opportunity to have any goods detained by the customs authoritiesinspected in order to substantiate the right holder’s claims. The competentauthorities shall also have authority to give the importer an equivalentopportunity to have any such goods inspected. Where a positive determinationhas been made on the merits of a case, Members may provide the competentauthorities the authority to inform the right holder of the names and addressesof the consignor, the importer and the consignee and of the quantity of thegoods in question.

Article 58

Ex officio action

Where Members require competent authorities to act upon their owninitiative and to suspend the release of goods in respect of which they haveacquired prima facie evidence that an intellectual property right is beinginfringed:

Appendix 167

(a) the competent authorities may at any time seek from the right holderany information that may assist them to exercise these powers;

(b) the importer and the right holder shall be promptly notified of thesuspension. Where the importer has lodged an appeal against thesuspension with the competent authorities, the suspension shall be subjectto the conditions, mutatis mutandis, set out at Article 55;

(c) Members shall only exempt both public authorities and officials fromliability to appropriate remedial measures where actions are taken orintended in good faith.

Article 59

Remedies

Without prejudice to other rights of action open to the right holder and subjectto the right of the defendant to seek review by a judicial authority, competentauthorities shall have the authority to order the destruction or disposal ofinfringing goods in accordance with the principles set out in Article 46. Inregard to counterfeit trademark goods, the authorities shall not allow the re-exportation of the infringing goods in an unaltered state or subject them toa different customs procedure, other than in exceptional circumstances.

Article 60

De minimis imports

Members may exclude from the application of the above provisions smallquantities of goods of a non-commercial nature contained in travellers’personal luggage or sent in small consignments.

Section 5: criminal procedures

Article 61

Members shall provide for criminal procedures and penalties to be appliedat least in cases of wilful trademark counterfeiting or copyright piracy on acommercial scale. Remedies available shall include imprisonment and/ormonetary fines sufficient to provide a deterrent, consistently with the levelof penalties applied for crimes of a corresponding gravity. In appropriatecases, remedies available shall also include the seizure, forfeiture anddestruction of the infringing goods and of any materials and implements thepredominant use of which has been in the commission of the offence. Membersmay provide for criminal procedures and penalties to be applied in othercases of infringement of intellectual property rights, in particular where theyare committed wilfully and on a commercial scale.

168 Appendix

PART IV: ACQUISITION AND MAINTENANCE OFINTELLECTUAL PROPERTY RIGHTS AND RELATEDINTER PARTES PROCEDURES

Article 62

1 Members may require, as a condition of the acquisition or maintenanceof the intellectual property rights provided for under Sections 2 through6 of Part II, compliance with reasonable procedures and formalities. Suchprocedures and formalities shall be consistent with the provisions of thisAgreement.

2 Where the acquisition of an intellectual property right is subject to theright being granted or registered, Members shall ensure that theprocedures for grant or registration, subject to compliance with thesubstantive conditions for acquisition of the right, permit the grantingor registration of the right within a reasonable period of time so as toavoid unwarranted curtailment of the period of protection.

3 Article 4 of the Paris Convention (1967) shall apply mutatis mutandis toservice marks.

4 Procedures concerning the acquisition or maintenance of intellectualproperty rights and, where a Member’s law provides for such procedures,administrative revocation and inter partes procedures such as opposition,revocation and cancellation, shall be governed by the general principlesset out in paragraphs 2 and 3 of Article 41.

5 Final administrative decisions in any of the procedures referred to underparagraph 4 shall be subject to review by a judicial or quasi-judicialauthority. However, there shall be no obligation to provide an opportunityfor such review of decisions in cases of unsuccessful opposition oradministrative revocation, provided that the grounds for such procedurescan be the subject of invalidation procedures.

PART V: DISPUTE PREVENTION AND SETTLEMENT

Article 63

Transparency

1 Laws and regulations, and final judicial decisions and administrativerulings of general application, made effective by a Member pertainingto the subject matter of this Agreement (the availability, scope,acquisition, enforcement and prevention of the abuse of intellectualproperty rights) shall be published, or where such publication is notpracticable made publicly available, in a national language, in such amanner as to enable governments and right holders to become acquaintedwith them. Agreements concerning the subject matter of this Agreement

Appendix 169

which are in force between the government or a governmental agency ofa Member and the government or a governmental agency of anotherMember shall also be published.

2 Members shall notify the laws and regulations referred to in paragraph1 to the Council for TRIPs in order to assist that Council in its review ofthe operation of this Agreement. The Council shall attempt to minimizethe burden on Members in carrying out this obligation and may decideto waive the obligation to notify such laws and regulations directly to theCouncil if consultations with WIPO on the establishment of a commonregister containing these laws and regulations are successful. The Councilshall also consider in this connection any action required regardingnotifications pursuant to the obligations under this Agreement stemmingfrom the provisions of Article 6ter of the Paris Convention (1967).

3 Each Member shall be prepared to supply, in response to a written requestfrom another Member, information of the sort referred to in paragraph1. A Member, having reason to believe that a specific judicial decision oradministrative ruling or bilateral agreement in the area of intellectualproperty rights affects its rights under this Agreement, may also requestin writing to be given access to or be informed in sufficient detail of suchspecific judicial decisions or administrative rulings or bilateralagreements.

4 Nothing in paragraphs 1, 2 and 3 shall require Members to discloseconfidential information which would impede law enforcement orotherwise be contrary to the public interest or would prejudice thelegitimate commercial interests of particular enterprises, public orprivate.

Article 64

Dispute settlement

1 The provisions of Articles XXII and XXIII of GATT 1994 as elaboratedand applied by the Dispute Settlement Understanding shall apply toconsultations and the settlement of disputes under this Agreement exceptas otherwise specifically provided herein.

2 Subparagraphs 1(b) and 1(c) of Article XXIII of GATT 1994 shall notapply to the settlement of disputes under this Agreement for a period offive years from the date of entry into force of the WTO Agreement.

3 During the time period referred to in paragraph 2, the Council for TRIPsshall examine the scope and modalities for complaints of the typeprovided for under subparagraphs 1(b) and 1(c) of Article XXIII of GATT1994 made pursuant to this Agreement, and submit its recommendationsto the Ministerial Conference for approval. Any decision of the MinisterialConference to approve such recommendations or to extend the periodin paragraph 2 shall be made only by consensus, and approved

170 Appendix

recommendations shall be effective for all Members without furtherformal acceptance process.

PART VI: TRANSITIONAL ARRANGEMENTS

Article 65

Transitional arrangements

1 Subject to the provisions of paragraphs 2, 3 and 4, no Member shall beobliged to apply the provisions of this Agreement before the expiry of ageneral period of one year following the date of entry into force of theWTO Agreement.

2 A developing country Member is entitled to delay for a further period offour years the date of application, as defined in paragraph 1, of theprovisions of this Agreement other than Articles 3, 4 and 5.

3 Any other Member which is in the process of transformation from acentrally-planned into a market, free-enterprise economy and which isundertaking structural reform of its intellectual property system andfacing special problems in the preparation and implementation ofintellectual property laws and regulations, may also benefit from a periodof delay as foreseen in paragraph 2.

4 To the extent that a developing country Member is obliged by thisAgreement to extend product patent protection to areas of technologynot so protectable in its territory on the general date of application ofthis Agreement for that Member, as defined in paragraph 2, it may delaythe application of the provisions on product patents of Section 5 of PartII to such areas of technology for an additional period of five years.

5 A Member availing itself of a transitional period under paragraphs 1, 2,3 or 4 shall ensure that any changes in its laws, regulations and practicemade during that period do not result in a lesser degree of consistencywith the provisions of this Agreement.

Article 66

Least-developed country members

1 In view of the special needs and requirements of least-developed countryMembers, their economic, financial and administrative constraints, andtheir need for flexibility to create a viable technological base, suchMembers shall not be required to apply the provisions of this Agreement,other than Articles 3, 4 and 5, for a period of 10 years from the date ofapplication as defined under paragraph 1 of Article 65. The Council forTRIPs shall, upon duly motivated request by a least-developed countryMember, accord extensions of this period.

Appendix 171

2 Developed country Members shall provide incentives to enterprises andinstitutions in their territories for the purpose of promoting andencouraging technology transfer to least-developed country Members inorder to enable them to create a sound and viable technological base.

Article 67

Technical cooperation

In order to facilitate the implementation of this Agreement, developedcountry Members shall provide, on request and on mutually agreed termsand conditions, technical and financial cooperation in favour of developingand least-developed country Members. Such cooperation shall includeassistance in the preparation of laws and regulations on the protection andenforcement of intellectual property rights as well as on the prevention oftheir abuse, and shall include support regarding the establishment orreinforcement of domestic offices and agencies relevant to these matters,including the training of personnel.

PART VII: INSTITUTIONAL ARRANGEMENTS; FINALPROVISIONS

Article 68

Council for Trade-Related Aspects of Intellectual Property Rights

The Council for TRIPs shall monitor the operation of this Agreement and, inparticular, Members’ compliance with their obligations hereunder, and shallafford Members the opportunity of consulting on matters relating to thetrade-related aspects of intellectual property rights. It shall carry out suchother responsibilities as assigned to it by the Members, and it shall, inparticular, provide any assistance requested by them in the context of disputesettlement procedures. In carrying out its functions, the Council for TRIPsmay consult with and seek information from any source it deems appropriate.In consultation with WIPO, the Council shall seek to establish, within oneyear of its first meeting, appropriate arrangements for cooperation with bodiesof that Organization.

Article 69

International cooperation

Members agree to cooperate with each other with a view to eliminatinginternational trade in goods infringing intellectual property rights. For thispurpose, they shall establish and notify contact points in their administrations

172 Appendix

and be ready to exchange information on trade in infringing goods. Theyshall, in particular, promote the exchange of information and cooperationbetween customs authorities with regard to trade in counterfeit trademarkgoods and pirated copyright goods.

Article 70

Protection of existing subject matter

1 This Agreement does not give rise to obligations in respect of acts whichoccurred before the date of application of the Agreement for the Memberin question.

2 Except as otherwise provided for in this Agreement, this Agreement givesrise to obligations in respect of all subject matter existing at the date ofapplication of this Agreement for the Member in question, and which isprotected in that Member on the said date, or which meets or comessubsequently to meet the criteria for protection under the terms of thisAgreement. In respect of this paragraph and paragraphs 3 and 4,copyright obligations with respect to existing works shall be solelydetermined under Article 18 of the Berne Convention (1971), andobligations with respect to the rights of producers of phonograms andperformers in existing phonograms shall be determined solely underArticle 18 of the Berne Convention (1971) as made applicable underparagraph 6 of Article 14 of this Agreement.

3 There shall be no obligation to restore protection to subject matter whichon the date of application of this Agreement for the Member in questionhas fallen into the public domain.

4 In respect of any acts in respect of specific objects embodying protectedsubject matter which become infringing under the terms of legislationin conformity with this Agreement, and which were commenced, or inrespect of which a significant investment was made, before the date ofacceptance of the WTO Agreement by that Member, any Member mayprovide for a limitation of the remedies available to the right holder asto the continued performance of such acts after the date of applicationof this Agreement for that Member. In such cases the Member shall,however, at least provide for the payment of equitable remuneration.

5 A Member is not obliged to apply the provisions of Article 11 and ofparagraph 4 of Article 14 with respect to originals or copies purchasedprior to the date of application of this Agreement for that Member.

6 Members shall not be required to apply Article 31, or the requirementin paragraph 1 of Article 27 that patent rights shall be enjoyable withoutdiscrimination as to the field of technology, to use without theauthorization of the right holder where authorization for such use wasgranted by the government before the date this Agreement becameknown.

Appendix 173

7 In the case of intellectual property rights for which protection isconditional upon registration, applications for protection which arepending on the date of application of this Agreement for the Member inquestion shall be permitted to be amended to claim any enhancedprotection provided under the provisions of this Agreement. Suchamendments shall not include new matter.

8 Where a Member does not make available as of the date of entry intoforce of the WTO Agreement patent protection for pharmaceutical andagricultural chemical products commensurate with its obligations underArticle 27, that Member shall:

(a) notwithstanding the provisions of Part VI, provide as from the dateof entry into force of the WTO Agreement a means by whichapplications for patents for such inventions can be filed;

(b) apply to these applications, as of the date of application of thisAgreement, the criteria for patentability as laid down in thisAgreement as if those criteria were being applied on the date offiling in that Member or, where priority is available and claimed,the priority date of the application; and

(c) provide patent protection in accordance with this Agreement as fromthe grant of the patent and for the remainder of the patent term,counted from the filing date in accordance with Article 33 of thisAgreement, for those of these applications that meet the criteria forprotection referred to in subparagraph (b).

9 Where a product is the subject of a patent application in a Member inaccordance with paragraph 8(a), exclusive marketing rights shall begranted, notwithstanding the provisions of Part VI, for a period of fiveyears after obtaining marketing approval in that Member or until aproduct patent is granted or rejected in that Member, whichever periodis shorter, provided that, subsequent to the entry into force of the WTOAgreement, a patent application has been filed and a patent granted forthat product in another Member and marketing approval obtained insuch other Member.

Article 71

Review and amendment

1 The Council for TRIPs shall review the implementation of this Agreementafter the expiration of the transitional period referred to in paragraph 2of Article 65. The Council shall, having regard to the experience gainedin its implementation, review it two years after that date, and at identicalintervals thereafter. The Council may also undertake reviews in the lightof any relevant new developments which might warrant modification oramendment of this Agreement.

174 Appendix

2 Amendments merely serving the purpose of adjusting to higher levels ofprotection of intellectual property rights achieved, and in force, in othermultilateral agreements and accepted under those agreements by allMembers of the WTO may be referred to the Ministerial Conference foraction in accordance with paragraph 6 of Article X of the WTOAgreement on the basis of a consensus proposal from the Council forTRIPs.

Article 72

Reservations

Reservations may not be entered in respect of any of the provisions of thisAgreement without the consent of the other Members.

Article 73

Security exceptions

Nothing in this Agreement shall be construed:

(a) to require a Member to furnish any information the disclosure of whichit considers contrary to its essential security interests; or

(b) to prevent a Member from taking any action which it considers necessaryfor the protection of its essential security interests;

(i) relating to fissionable materials or the materials from which theyare derived;

(ii) relating to the traffic in arms, ammunition and implements of warand to such traffic in other goods and materials as is carried ondirectly or indirectly for the purpose of supplying a militaryestablishment;

(iii) taken in time of war or other emergency in international relations;or

(c) to prevent a Member from taking any action in pursuance of itsobligations under the United Nations Charter for the maintenance ofinternational peace and security.

Notes

Introduction

1 The term ‘European Communities’ (or EC) is used to connote the activities ofthe EC institutions and the collective views of its Member States throughoutthis book in preference to the terms ‘European Union’ or ‘European Community’.This allows for a consistency in terminology throughout the book and takesaccount of the specific legal standing of the European Communities in the WTOAgreement and all subsequent documentation. The fifteen Member States ofthe European Communities are: Austria; Belgium; Denmark; Finland; France;Germany; Greece; Ireland; Italy; Luxembourg; The Netherlands; Portugal; Spain,Sweden; United Kingdom.


1 By 26 July 2001 there were 142 Members of the WTO. A full list of Members,with dates of membership, and countries or organisations holding Observer statuscan be found on the WTO web site at http://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm (26 July 2001). On 11 November 2001 the WTOMinisterial Conference in Doha, Qatar, also approved applications of the People’sRepublic of China and Chinese Taipei, which are set to become the 143rd and144th Members of the WTO http://www-chil.wto-ministerial.org/english/thewto_e/minist_e/min01_e/min01_11nov_e.htm (16 November 2001).

2 Piracy generally refers to misappropriation of inventions protected by patentsor works protected by copyright. Counterfeiting refers to imitation goodsinfringing trademarks.

3 This range of issues is set out in Article 1 of the Agreement on Trade-RelatedAspects of Intellectual Property Rights (TRIPs).

4 The global pharmaceutical industry is divided into two types of undertaking:proprietary and generic drug manufacturers. Proprietary manufacturers investheavily in research and development (R&D) and the costs of regulatory approvalprocedures (including clinical trials). They rely on patent protection to recouptheir investment costs and improve shareholder dividends. For genericmanufacturers, the ability to bring cheap copies of medicines onto the market isassisted by less stringent patent protection (for a good discussion of the tensionsthat exist between research-based and generic drug manufacturers, see Foster1998: 296). Proprietary pharmaceutical companies engaged in research into newmedicinal products estimate that the cost of inventing and bringing a new productto market at 1995 prices is more than US$ 300 million and that on a cumulativecash flow basis the break-even point for pharmaceutical companies may not bereached until some 18 years after patent filing (IFPMA 1995: 29). The

176 Notes

International Federation of Pharmaceutical Manufacturers Associations(IFPMA) has identified that, in order for a patent to yield value to research-based companies in the pharmaceutical industry, three features must be present:first, patent term must be of sufficient duration for the patent holder to be ableto obtain a return on investment; second, the patent must cover the inventionthat is the subject of the patent, namely the new chemical entity or product andnot simply the process by which it has been prepared; third, the rights of thepatent holder must be effectively enforced (IFPMA 1995: 29). As Adelman andBaldia (1996: 510) point out, the dilemma of the free-rider problem in thepharmaceutical sector is therefore that the cost of developing new drugs is leftalmost entirely to the developed world, with the effect that research anddevelopment targeted towards finding cures for locally endemic diseases maynot be forthcoming if the patent system is not designed in such a way that itencourages investment.

5 GATT Doc. No. L/4817 (31 July 1979).6 Agreement on Measures to Discourage the Importance of Counterfeit Goods, GATT Doc.

No. L/5382 (18 October 1982).7 Thirty-Eighth Session at Ministerial Level Ministerial Declaration, GATT BISD, 30th

Supp. at 9 (1983).8 GATT Doc. No. L/5758 (1982).9 Outside the WIPO framework there also existed a separate international

copyright treaty, the Universal Copyright Convention (UCC) of 1952. The UCCwas concluded under the auspices of UNESCO, primarily as a way to involve theUnited States and South American countries in the international framework ofintellectual property protection (Blakeney 1995: 76). The UCC requires thedomestic law of a country to adhere to the Convention before becoming asignatory, this requirement being more stringent than the Paris and Berneconventions, which merely suggest that signatories will be in a position underdomestic law to give effect to the provision of the conventions but, with thewithdrawal of the United States from UNESCO in 1984 and its accession to theBerne Convention in 1988 the UCC became a far less significant treaty. For ahistorical view of intellectual property protection in the United States seeDamschroder (1988).

10 The full text of the Paris Convention for the Protection of Industrial Property isavailable at http://www.wipo.int/treaties/ip/paris/index.html (22 October 2001).

11 The text of the Berne Convention for the Protection of Literary and ArtisticWorks is available at http://www.wipo.int/treaties/ip/berne/index.html (22October 2001).

12 A full list of contracting parties to the Paris Convention for the Protection ofIndustrial Property is available at: http://www.wipo.int/treaties/docs/english/d-parties.doc (22 October 2001).

13 A full list of contracting parties to the Berne Convention for the Protection ofLiterary and Artistic Works is available at http://www.wipo.int/treaties/docs/english/e-berne.doc (22 October 2001).

14 United Nations Department of Economic and Social Affairs, UNCTADSecretariat, The Role of the Patent System in the Transfer of Technology to DevelopingCountries, U.N. Doc. No. TD/B/AC.11/19 (1974).

15 According to Clive Bradley, former Director of The Publishers’ Association, ininterview with the author 30 July 1998, London.

16 Possible Renewal of the Generalised System of Preferences – Hearing Before the Subcommitteeon Trade of the U.S. House of Representatives Committee on Ways and Means, 98th Cong.1st Sess. 57 (1983).

17 Unfair Foreign Trade Practices, Stealing American Intellectual Property: Imitation is NotFlattery, 98th Cong. 2nd Sess. 1–3 (1984).

Notes 177

18 Ibid. p. 46.19 Tariff Act of 1930, Chapter 497, Section 337, 46 Stat. 703 (1930) (codified as

amended at 19 USC sec. 1337(d)(e) (1988)).20 98 Stat. 2948 (1984).21 Although the post of US Trade Representative had existed since the Trade

Expansion Act of 1962, it was not until 1974 that the position was accorded fullCabinet rank and the Office of the United States Trade Representativeestablished as a Cabinet-level agency within the Executive Office of thePresidency (see Tancer and Tancer 1999: 891).

22 The GSP scheme provides for special tariff preferences for imports fromdesignated developing countries trading with the United States.

23 According to Emory Simon, then in the Office of the United States TradeRepresentative (quoted in Sell 1995: 170).

24 In 1990 the United States lifted its sanctions in response to an undertaking byBrazil to revise its patent laws but continued to list Brazil as a priority foreigncountry in response to its failure to meet its undertakings for patent law reform.

25 Decision of 28 November 1985 on Establishment of the Preparatory Committee, GATT Doc.No. L/5925, reprinted in GATT, BISD 32nd Supp. at 10 (1986).

26 Ministerial Declaration on the Uruguay Round, GATT Doc. No. MIN.DEC (20September 1986): 7–8.

27 PREP.COM(86)/W/41/Rev.1 (16 July 1986).28 PREP.COM(86)/W/49 (29 July 1986).29 Ministerial Declaration on the Uruguay Round, GATT Doc. No. MIN.DEC (20

September 1986).30 Ibid. pp. 8–9.31 According to Jacques Gorlin, Consulting Economist, The Gorlin Group, and

coordinator of the Intellectual Property Committee. Interview with the author,Washington, DC, 1 April 1998.

32 In addition, a number of other business associations have been identified asplaying a significant role in the Special 301 process: the Computer Software andServices Industry Association, the Business Software Alliance, the PharmaceuticalManufacturers Association, the Chemical Manufacturers Association, theNational Agricultural Chemicals Association, the Motor EquipmentManufacturers Association, the Auto Exports Council, Intellectual PropertyOwners Inc., and the Semiconductor Industry Association (Sell 1995: 166).

33 According to Jacques Gorlin. Interview with the author, Washington DC, 1 April1998. See also the accounts events given by Drahos (1995: 12), Enyart (1990: 54)and Sell (1998: 137).

34 The significance of the role played by European business interests in draftingproposals for a framework of GATT provisions on intellectual property was thesubject of a discussion between the author and John Beton, President of theTrade Mark Patent and Design Federation in the UK (1983–85) and Chairmanof the UNICE Intellectual Property Working Group, conducted at the Universityof Warwick, 7 April 1998.

35 19 U.S.C. section 2242 (1990).36 Special 301 was amended in the United States Uruguay Round Agreements Act

to clarify that a country can be found to deny adequate and effective intellectualproperty protection even if it is in compliance with its obligations under theTRIPs Agreement.

37 Required by 19 U.S.C. section 2241(b) (1988).38 19 U.S.C. section 2242(a)(1)(A) (1988).39 Omnibus Trade and Competitiveness Act (1988 sec. 1303).40 19 U.S.C. section 2242(b)(1)(A) (1988).41 19 U.S.C. section 2242(b)(1)(B) (1988).

178 Notes

42 19 U.S.C. section 2242(b)(1)(C) (1988).43 19 U.S.C. section 2414(a)(3)(A)-(B) (1988).44 19 U.S.C. section 2416(b) (1988).45 Office of the United States Trade Representative Press Release, 1 May 1998.46 The US has since alleged that Argentina has failed to comply with provisions of

the TRIPs Agreement with respect to adequate protection of confidentialinformation submitted for the approval of agrochemical products and thegranting of exclusive marketing rights (see Bensadon 1999: 6).

47 For instance, 1998 Special 301 Recommendations submitted to the United States TradeRepresentative on February 28, 1998, Washington DC: International IntellectualProperty Alliance.

48 The US pharmaceutical industry trade association, the PharmaceuticalManufacturers’ Association, changed its name to the Pharmaceutical Researchand Manufacturers’ Association (PhRMA) in 1994 in order to distinguish thework of research-based companies from generic competitors, the latter whichrelied on imitation of patented products of the former (see also Weissman 1996:1089).


1 GATT Doc. No. GATT/1405 (5 February 1987).2 A unit of the GATT Secretariat was created to assist the TRIPs Negotiating

Group, headed by David Hartridge (who later became Director of the WTOTrade in Services Division) with Adrian Otten (now the Director of the WTOIntellectual Property and Investment Division) as his assistant.

3 In early 2001 the WTO made available eighty-seven previously restricteddocuments that throw more light on the progress of negotiations leading to theTRIPs Agreement. The eighty-seven documents, including a full list set out inGATT Doc. No. MTN.GNG/NG11/W/67/Rev.1 (30 March 1990), can bedownloaded from the WTO web site at http://www.wto.org/english/tratop_e/trips_e/trips_e.htm (16 November 2001).

4 GATT Doc. No. MTN.GNG/NG11/W/14 (20 October 1987).5 GATT Doc. No. MTN.GNG/NG11/W/16 (20 November 1987).6 GATT Doc. MTN.GNG/NG11/W/26 (7 July 1988).7 GATT Doc. No. MTN.GNG/NG11/W/17 (23 November 1987).8 See conclusions of the Montreal Mid-Term Review in GATT Doc. No. MTN.TNC/

7(MIN) (9 December 1988).9 Special 301 actions were not reserved for developing countries. In 1991 Australia

was placed on the priority watch list because of the limits imposed on theimportation of audio-visual material from the United States.

10 HR Conf. Rep. No. 576, 100th Cong. 2d Sess. 580 (1988).11 GATT Doc. No. MTN.TNC/11 (21 April 1989).12 GATT Doc. Nos. MTN.GNG/NG11/13 (3–4 July 1989) and MTN.GNG/NG11/

14 (12–14 July 1989).13 Proposals were tabled by Australia in GATT Doc. No. MTN.GNG/NG11/W/35

(10 July, 1989); by the Nordic countries in GATT Doc. No. MTN.GNG/NG11/W/36 (10 July, 1989); by India in GATT Doc. No. MTN.GNG/NG11/W/37 (10 July1989); by Switzerland in GATT Doc. No. MTN.GNG/NG11/W/38 (11 July 1989);by Korea in GATT Doc. No. MTN.GNG/NG11/W/48 (26 October 1989); by HongKong in GATT Doc. No. MTN.GNG/NG11/W/51 (29 November 1989); by Austriain GATT Doc. No. MTN.GNG/NG11/W/55 (8 December 1989); and by Brazil inGATT Doc. No. MTN.GNG/NG11/W/57 (11 December 1989).

14 WIPO Doc. WO/INF/29 (September 1988).15 The group of developing countries consisted of Argentina, Brazil, Chile, China,

Notes 179

Colombia, Cuba, Egypt, India, Nigeria, Peru, Tanzania and Uruguay. Pakistanand Zimbabwe joined the group later and subscribed to the principles alreadyset out in the developing countries’ proposal.

16 GATT Doc. No. MTN/GNG/NG11/W/68 (29 March 1990).17 GATT Doc. No. MTN.GNG/NG11/W/70 (11 May 1990).18 The fourteen developing countries were: Argentina, Brazil, Chile, China,

Columbia, Cuba, Egypt, India, Nigeria, Pakistan, Peru, Tanzania, Uruguay andZimbabwe.

19 GATT Doc. No. MTN.GNG/NG11/W/71 (14 May 1990).20 GATT Doc. No. MTN.GNG/NG11/W/73 (14 May 1990).21 GATT Doc. No. MTN.GNG/NG11/W74 (15 May 1990).22 GATT Doc. No. MTN.GNG/NG11/W75 (13 June 1990).23 In interviews conducted by the author with Jacques Gorlin, Consulting Economist

to the Gorlin Group and coordinator of the Intellectual Property Committee,Washington DC. Interview with the author, 1 April 1998, and John Beton,Chairman of the UNICE Intellectual Property Working Group. Interview withthe author, 7 April 1998. See also Ryan (1998: 112).

24 GATT Doc. No. MTN.GNG/NG11/W/76 (18 July 1990).25 GATT Doc. No. MTN.TNC/W/35/Rev.1 (3 December 1990).26 According to John Beton, President of the Trade Mark Patent and Design

Federation in the UK (1983–85) and Chairman of the UNICE IntellectualProperty Working Group. Interview with the author, University of Warwick, 7April 1998.

27 In reality the size and membership of the ‘10 plus 10’ Group varied dependingon the issue to be discussed at any particular meeting, with the Group as smallas ‘5 + 5’ and as large as twenty-five on different occasions. Countries thatregularly participated include the United States, Canada, the EuropeanCommunities, Japan, Argentina, Brazil, the Nordic countries, Hong Kong, India,Malaysia, Switzerland and Thailand.

28 According to John Beton, President of the Trade Mark Patent and DesignFederation (TMPDF) in the UK (1983–85) and Chairman of the UNICEIntellectual Property Working Group. Interview with the author, 7 April 1998.

29 Progress of Work in Negotiating Groups: Stock Taking, GATT Doc. No. MTN.TNC/W/89/Add.1 (7 November 1991).

30 Agreement on Trade-Related Aspects of Intellectual Property Rights, Including Trade inCounterfeit Goods (Annex III) in Dunkel Draft.

31 For a discussion of moral rights and other detailed provisions of the TRIPsAgreement see Chapter 3.

32 Copyright industries criticised the provisions on legal protection of computerprograms because of: the absence of coverage of the legal status of videogramproducers and direct satellite broadcasting; and the concept of theft in relationto cable and satellite communications (see also Blakeney 1996b: 7; Oman 1993:160).

33 But to no avail: the final text of the TRIPs Agreement adopted in Marrakesh on15 April 1994 contained the main elements of the Dunkel Draft that had beenso vigorously opposed by the motion picture industry (see also Gervais 1998:25).

34 Annex III, Draft Final Act Embodying the Results of the Uruguay Round ofMultilateral Trade Negotiations, MTN.TNC/W/FA (20 December 1991).

35 Enyart (1990: 55), for instance, describes discussions between high technologyindustries through the Korea–US Business Council.

36 The US pharmaceutical industry called for ‘pipeline protection’ to be includedin the TRIPs Agreement, whereby ideas are protected when they are still in theresearch and development stage. The current duration of pipeline protection in

180 Notes

the US is ten years, but pharmaceutical companies claim that the absence ofpipeline protection from the TRIPs Agreement will be detrimental to US firms,which will not have sufficient time to recoup expenditure on research anddevelopment once clinical trials and market authorisation procedures haveeroded the patent life of new medicinal products (see McGrath 1995: 403).


1 Helpful analyses of the TRIPs Agreement have also been offered by Blakeney(1996b), who provides a useful article-by-article summary of the Agreement,Gervais (1998), who compares the final text of the TRIPs Agreement with twoearlier drafts, and Gorlin (1999), who examines the provisions of the TRIPsAgreement with particular relevance to the pharmaceutical industry.

2 For good discussions of issues relating to international exhaustion see Bronckers(1994: 1265), Grubb (1999: 368–9), Pacón (1996: 337), Verma (1998: 534) andfor those relating to the exhaustion of rights doctrine in the EuropeanCommunities see O’Regan (1995: 26).

3 According to Clive Bradley, former Director of the Publishers’ Association.Interview with the author, London, 30 July 1998.

4 For a good discussion of the scope of copyright protection under the TRIPsAgreement see Jaszi (1996: 595).

5 A footnote to Article 27.1 clarifies an anomaly between the EuropeanCommunities and the United States, by stating that ‘inventive step’ and ‘capableof industrial application’ should be considered synonymous with ‘non-obvious’and ‘useful’, as the last two terms are commonly used in US patent law.

6 Interview with Koos Rasser, Head of Patents, Procter and Gamble Inc.,Washington, DC, 31 March 1998.

7 For a good discussion of the US position on first-to-file, and the ‘ManbeckCompromise’ in particular, see Wegner 1996: 541.

8 Action to reduce the excessive cost of patent litigation, especially the costs arisingfrom the first-to-invent system in the United States, was discussed by theTransatlantic Business Dialogue (TABD) during an US–EU Symposium onIntellectual Property on 6–8 October 1997 in Washington DC. It went on to beidentified as a key bilateral issue for future discussions in the resultant TABDIntellectual Property Issues Group Action Plan. The European CommissionCommunication, ‘The New Transatlantic Marketplace’, of 11 March 1998 alsoreferred to the US first-to-invent system, calling it ‘anachronistic’ and criticisingit as being ‘extremely demanding in terms of evidence for all inventive activitiesand [for creating] the potential for extensive and highly costly litigation’(p. 19).

9 GATT Doc. No. MTN.GNG/NG11/W/71, 14 May 1990.10 According to Peter Richardson, Senior Assistant General Counsel and General

Patent Counsel, Pfizer Inc. Interview with the author, 30 March 1998. This viewwas corroborated from the European perspective by John Beton, President ofthe Trade Mark Patent and Design Federation (TMPDF) in the UK (1983–85)and Chairman of the UNICE Intellectual Property Working Group. Interviewwith the author, 7 April 1998.

11 GATT Doc. No. MTN.GNG/NG11/W/40, 5 September 1989.12 Footnote 14 to Article 51 of the TRIPs Agreement defines ‘counterfeit’ goods as

those involving copying of trademarks, whereas ‘pirated’ goods are those thatinfringe a copyright or a related right.

13 Eric Smith of the IIPA also criticises some of the same countries listed here(Smith 1996: 575).

14 Afghanistan, Bangladesh, Benin, Bhutan, Botswana, Burkina Faso, Burundi,

Notes 181

Cambodia, Cape Verde Islands, Central African Republic, Chad, Comoros,Djibouti, Equatorial Guinea, Ethiopia, Gambia, Guinea, Guinea-Bissau, Haiti,Kiribati, Lao PDR, Lesotho, Liberia, Madagascar, Malawi, Maldives, Mali,Mauritania, Mozambique, Myanmar, Nepal, Niger, Rwanda, Samoa, Sao Toméand Principe, Sierra Leone, Solomon Islands, Somalia, Sudan, Togo, Tuvalu,Uganda, United Republic of Tanzania, Vanuatu, Yemen, Zambia, Zaire(UNCTAD 1994).


1 For a fuller discussion of the role of the TRIPs Council see Geuze and Wager(1999: 347–84), Otten and Wager (1996: 410); and Dörmer (2000: 3).

2 Notifications under Article 63.2 of the TRIPs Agreement and the AnnualReports of the TRIPs Council can be found on the WTO website at http://docsonline.wto.org/gen_browse.asp (26 July 2001). Procedures for notificationof national laws and regulations are set out in document IP/C/2. The format forlisting notifications is in document IP/C/4. The checklist of issues on enforcementrequired by the TRIPs Council is in document IP/C/5. The Annual Report of theTRIPs Council for 2000 is in document IP/C/22.

3 The TRIPs Council also has a mandate to seek resolution of a set of issues notresolved during the Uruguay Round negotiations. This ‘built-in agenda’ of issuessubject to reconciliation in the Council comprises Article 23.4 (the establishmentof a multilateral system of notification and registration of geographicalindications for wines), Article 24.2 (review of any matter affecting compliancewith obligations regarding geographical indications) and Article 27.3.b (reviewof patent protection for plants and animals other than microorganisms and suigeneris protection for plant varieties). Although there is a great degree ofscepticism amongst national representatives on the TRIPs Council that theseissues can actually be resolved, under the terms of the Agreement they arerequired to attempt conciliation (for a discussion of the built-in agenda of theTRIPs Agreement, see also Otten 1998: 531). In addition, Article 71.1 requiredthe TRIPs Council to commence a review the Agreement at the end of 2000 inthe context of examining the need for modification or amendment to theAgreement as a whole.

4 For example, The Patent Office: TRIPs Agreement Article 63(2) Notification UnitedKingdom (1996).

5 For example, The Patent Office: TRIPs Agreement Checklist of Issues on Enforcementof Intellectual Property Rights Response by the United Kingdom (1996).

6 A review and analysis of Article 63.2 notifications can be found in Willis (2000:180).

7 Ireland and the UK, for instance, demonstrated from the outset a willingness toexamine the compatibility of national law (particularly compulsory licensingprovisions) with the TRIPs Agreement and demonstrated a resolve to ensurethat patent law was fully in accordance with the TRIPs Agreement (for adiscussion of compulsory licensing provisions, see Giust 1997: 83–6).

8 Review of Legislation on Enforcement Replies from the United Kingdom toquestions posed by the United States (Council for TRIPs IR-17, 14 November1997).

9 However a WTO Dispute Settlement Panel is investigating a complaint againstthe United States on grounds that Section 110(5) of the Copyright Act isincompatible with the TRIPs Agreement. See S/160/R and DS/160/12. A list ofDispute Body and Appellate Body Reports is available on the WTO website athttp://www.wto.org/english/tratop_e/dispu_e/distab_e.htm#patent (26 July2001).

182 Notes

10 The membership of the Standing Advisory Committee on Industrial Property(SACIP) consists of: the Law Society; the Law Society of Scotland; the BarCouncil; the Institute of Patentees and Inventors; the Trade Marks, Patents andDesigns Federation; the Confederation of British Industry; the IntellectualProperty Law Unit of Queen Mary and Westfield College, University of London;the British Retail Consortium; the Incorporated Society of British Advertisers;the Chartered Society of Designers; the Chartered Institute of Patent Agents;the Institute of Trade Mark Agents; the Association of British Chambers ofCommerce; the Consumers’ Association/National Consumers’ Council; theFederation of Small Businesses; and the Licensing Executives Society of Britainand Ireland.

11 There is frustration that EFPIA remains inflexible as regards representationallowed at its meetings in Brussels. Only one representative of the UK Associationof British Pharmaceutical Industries (ABPI) is allowed to attend EFPIA meetings,despite the strength and expertise of the UK proprietary pharmaceutical sector.

12 In 1999 the members of Interpat were Takeda Chemical Industries, Bristol-Meyers Squibb Company, Novartis International AG, Novo Nordisk A/S,American Home Products Corporation, BASF AG, Eli Lilly and Company, SolvaySA, Bayer AG, Ares-Serono International AG, Merck & Co. Inc., AKZO NobelPharma International BV, GlaxoWellcome plc, Yamanouchi Pharmaceutical Co.Ltd, Boehringer Ingelheim Gmbh, Hoechst Marion Roussel, Schering AG,Schering Plough Corporation, F. Hoffmann-La Roche AG, Sankyo Co. Ltd., AstraAB, Pfizer Inc., SmithKlein Beecham plc, Rhone-Polenc-Rorer SA, Merck KgaA,Zeneca Group plc, Synthelabo, Abbott Laboratories G.D., Searle & Co., Sanofiand Eisai Co. Ltd (Gorlin 1999: 1).

13 Nevertheless, a senior executive of GlaxoWellcome chaired the influential IndiaInternational Task Force of Interpat during preparations for the US–India WTODispute Settlement Panel.

14 The Dispute Settlement Understanding is contained in the WTO Agreement,Annex 2: Understanding on Rules and Procedures Governing the Settlement ofDisputes.

15 Opinion 1/94, Re. the Uruguay Round Treaties [1995] Common Market Law Reports1: 205 in which the European Court of Justice decided that the EuropeanCommunity and its Member States were jointly competent to conclude the TRIPsAgreement.

16 For a discussion of EC competence and the TRIPs Agreement see Dreier (1996:268) and Wooldridge (1997: 1).

17 Council Regulation (EEC) No. 2641/84 of 17 September 1984 on thestrengthening of the common commercial policy with regard in particular toprotection against illicit commercial practices, OJL 252/1 (1984), 20 September1984.

18 For a good discussion of cases involving intellectual property that have beenbrought under the Regulation see O’Regan (1995: 20).

19 According to Jacques Gorlin, Consulting Economist, The Gorlin Group andcoordinator of the Intellectual Property Committee. Interview with the author,Washington, DC, 1 April 1998.

20 According to one senior executive of a company that was formerly an IPCMember, before the TRIPs Agreement was concluded the annual fee formembership of the IPC was $40,000 per annum. This was reduced to $25,000per annum for each company after conclusion of the TRIPs Agreement. Interviewwith the author 31 March 1998.

21 In the domestic context, US businesses (both large and small firms) anduniversities also make their views know to policy-makers through theirmembership of the Intellectual Property Owners (IPO), another single-issuegroup which lobbies on behalf of its members in Washington, DC.

Notes 183

22 Letter from the Eric Smith, President of the IIPA, to Joseph Papovich, AssistantUSTR for Services, Investment and Intellectual Property, 23 February 1998. Acopy of the letter was given to the author by Eric Smith on 2 April 1998.

23 These reported losses are estimates calculated on the basis of informationprovided by the IIPA’s member associations. Although not independentlycorroborated, the IIPA has stated its belief that these estimates actuallyunderestimate losses due to piracy experienced by the US copyright-basedindustries.

24 In 1998 the PhRMA began its communication to member companies, requestingthe completion of a fax-back form indicating countries where inadequate patentprotection for pharmaceutical products had been identified, with the suggestionthat ‘As we approach the end of January and the middle of a Washington winter,we are reminded that it is ‘Special 301’ Season again.’ Memo from thePharmaceutical Research and Manufacturers of America, 28 January 1998.

25 Submission of the Pharmaceutical Research and Manufacturers of America forthe ‘Special 301’ Report on Intellectual Property Barriers 1998, 13 February1998.

26 The United States finally initiated a complaint against Argentina under theWTO Dispute Settlement Procedure on 6 May 1999, alleging an infringementof Articles 27, 65(2) and 70(9) of the TRIPs Agreement in respect to patentprotection for pharmaceutical products, WT/DS171/1.

27 An earlier dispute between the United States and Indonesia on the nationalmotor programme, covering a wide range alleged infringements to the GATT,Agreement on Trade-Related Investment Measures and Agreement on Subsidiesand Countervailing Measures, had already made reference to the TRIPsAgreement. WT/DS59.

28 WT/DS28.29 WT/DS42.30 WT/DS28/4.31 WT/DS42/4.32 IP/N/1/JPN/C/1/Rev.1.33 Exclusive marketing rights must be granted provided that (1) a mailbox

application in respect of the product has been filed in the relevant country; (2)a patent application has been filed in respect of the same product in anotherWTO Member after 1 January 1995; (3) other Member has granted a patent;(4) other Member approved the marketing of the product; and (5) the memberin which the mailbox application has been made must have approved themarketing of the product (Macdonald-Brown and Ferera 1998: 69).

34 For a detailed discussion of mailbox application procedures, see IFPMA (1995: 32).35 WT/DS36/4.36 IP/N/1/PAK/1.37 Figures contained in India’s statement of appeal, WT/DS50.AB/R (quoted in

Dörmer 2000: 15).38 Appendix 3 of Panel Report WT/DS50/R.39 WT/DS50/R.40 WT/DS50/AB/R.41 Because India was entitled to a transitional period under Article 65 and because

Article 1.1 of the TRIPs Agreement explicitly states that Members ‘shall be freeto determine the appropriate method of implementing the provisions of thisAgreement within their own legal system and practice (see also Reichman 1998:595).

42 T/DS50/10/Add.1. Status report by India.43 As a postscript to the US complaint against India, after the Panel Report on the

complaint by the United States against India had been issued, the EuropeanCommunities also requested the establishment of a Panel on the same matter

184 Notes

to examine their own complaints relating to India’s obligations under Article70.8 and 70.9 of the TRIPs Agreement. The purpose of the EC’s complaint onthe same grounds as those of the United States can be accounted for by the factthat WTO Member countries are only entitled to compensation and mandatedretaliatory action if that Member has obtained authorisation after themselvesfiling a complaint under the Dispute Settlement Procedures (see Geuze andWager 1999: 350). The Panel Report on the dispute between the EuropeanCommunities and India was subsequently issued on 24 August 1998, confirmingthe basic tenants of the earlier Panel Report on the US complaint against Indiaand rejecting India’s procedural claims that the European Communities shouldhave initiated its complaints at the same time as the dispute between the UnitedStates and India, in which the European Communities had been a third party.

44 WS/DS50/11. Communication from the permanent mission of the United States.These concerns now appear to have been overcome.

45 WT/DS114/1.46 Roche Products Inc. v. Bolar Pharmaceuticals Co. Inc., 221 USPQ 937 (Fed. Cir. 1984).47 Explanations of the Bolar provision can also be found in Engelberg (1999),

Hantman (1985), Krulwich (1985), Milenkovich (1999), Molzon (1995), Savina(1998) and Tancer (1995).

48 Although Grubb (1999: 162) reminds us that this is a misnomer since the Courtin Roche v. Bolar decided that an infringement had taken place.

49 Article 30 of the TRIPs Agreement allows for limited exceptions to the exclusiverights conferred by a patent provided that such exceptions do not unreasonablyconflict with the normal exploitation of the patent and do not unreasonablyprejudice the legitimate interests of the patent owner, taking into account thelegitimate interests of third parties.

50 WT/DS114/R.51 WT/DS170/1.52 On 30 April 1996 the United States also requested consultations with Portugal

complaining that the Portuguese Industrial Property Act did not provide theminimum period of twenty years patent protection as required by Article 33 ofthe TRIPs Agreement. On 3 October 1996 the United States and Portugal notifiedthe WTO Dispute Settlement Body that an agreement had been reached wherebyPortugal issued a regulation ensuring twenty years patent protection.

53 WT/DS170/R, p. 31. First submission from the United States (18 November1999).

54 WT/DS170/R.55 WT/DS170/AB/R.56 Tel-Aviv District Court 1512/93.57 For a good overview of the amendments to Israeli law see Ophir (2000).58 ‘EU Worries Over Cyprus Patent Bill’, The Cyprus Weekly, 26 September to 2

October 1997.59 WT/DS86/2.60 An order to compel one party to permit the other to enter premises on grounds

of a court order for the detention and preservation of documents. The name isderived from the case of Anton Piller K.G. v. Manufacturing Processes Ltd [1976] 1All E.R. 779.

61 On 14 May 1997 the United States also requested consultations with Denmarkin respect to Articles 50, 63 and 65 of the TRIPs Agreement.

62 WT/DS125/1.63 WT/124/1.64 WT/DS160.

Notes 185


1 Henderson (1997: 655), however, has criticised Rapp and Rozek on grounds thattheir argument assumes that developing countries would see benefits accruefrom intellectual property protection in the same way as developed countries.

2 UNCTAD-Doc. TD/B/40(2)/17, TD/B/WG.5/12 of 1994, Final Report of the AdHoc Working Group on the Interrelationship between Investment and Technologyto the Trade and Development Board, No. 27.

3 For those too poor to pay, they suggest a system of subsidies.4 Durán and Michalopoulos (1999: 862) nevertheless point out that there is

sufficient flexibility in the TRIPs Agreement to allow developing countries toimpose price controls.

5 In 1988 the World Intellectual Property Organisation listed forty-eight countriesthat did not provide patent protection for pharmaceutical products:Argentina, Australia, Bolivia, Brazil, Bulgaria, Chad, China, Colombia, Cuba,Czechoslovakia, Ecuador, Egypt, Finland, German Democratic Republic, Ghana,Greece, Hungary, Iceland, India, Iran, Iraq, Korea, Lebanon, Libya, Malawi,Mexico, Monaco, Mongolia, Morocco, New Zealand, Norway, Pakistan, Peru,Poland, Portugal, Romania, Soviet Union, Spain, Syria, Thailand, Tunisia, Turkey,Uruguay, Venezuela, Vietnam, Yugoslavia, Zambia, Zimbabwe (according toNogués 1990: 83).

6 Including GlaxoSmithKlein, Merck, Eli Lilly, Bayer AG and Bristol-MeyersSquibb.

7 Against this it must be acknowledged that the United States, where a largeproportion of proprietary drug manufacturers with global reach are based, isalso the world’s leading donor of assistance to control HIV and AIDS in developingcountries with expenditure by the United States Agency for InternationalDevelopment to combat HIV and AIDS in sub-Saharan Africa amounting to£125 million in 1999 (Wooldridge 2000: 104).

8 According to Jacques Gorlin, Consulting Economist, The Gorlin Group. Interviewwith the author, Washington, DC, 1 April 1998.

9 ‘Brazil and Roche agree deal on Aids drug price cut’, Financial Times 31 August2001, available at http://www.ft.com (4 September 2001).

10 Philip W. Grubb is Intellectual Property Counsel for Swiss pharmaceuticalcompany Novartis.

11 On indigenous knowledge and intellectual property rights see Blakeney (2000),Drahos (1996–97), Drahos (2000), de Koning (1997–98), Kongolo (2001).

12 See the description of Part III of the TRIPs Agreement set out in Chapter 3.13 The website of Enforcers of Intellectual Property Rights (India) Ltd can be found

at http://www.antipiracy-india.com (13 August 2001).14 Agreement between the World Intellectual Property Organisation and the World

Trade Organisation (22 December 1995).15 The UN/ECE Advisory Group on the Implementation of Intellectual Property

Rights for Investment website can be found at http://www.unece-ipr.org/ (11September 2001).

16 The partner countries in the EC TACIS programme are Armenia, Azerbaijan,Belarus, Georgia, Kazakhstan, Kyrgystan, Moldova, Mongolia, Russia,Tadjikistan, Turkmenistan, Ukraine and Uzbekistan.

17 The acronym PHARE is derived from the French name for the assistanceprogramme: Pologne-Hongrie: aide à la reconstruction économique. The partnercountries in the EC PHARE programme are Albania, Bosnia-Herzegovina,Bulgaria, the Czech Republic, Estonia, Macedonia, Hungary, Latvia, Lithuania,Poland, Romania, Slovakia and Slovenia.

18 The ASEAN web site can be found at: http://www.asean.or.id/ (22 October 2001).

186 Notes


1 The website of the Transatlantic Business Dialogue can be found at http://www.tabd.com/ (8 October 2001).

2 Differences between the United States and European Communities on first-to-invent and first-to-file are also highlighted in the TABD 1988 Mid-Year Reportand Scorecard.

3 Draft Communication from the Commission to the Council, the EuropeanParliament and the Economic and Social Commission on The New TransatlanticMarketplace from Sir Leon Brittan, Martin Bangemann and Mario Monti, 11March 1998.

4 Ibid. p. 19.5 The concerns of the IPC and UNICE were, to some extent, confirmed by the

request for an extension to the transitional period allowed under Article 65made by Cuba, the Dominican Republic, Egypt and Honduras (WT/GC/W/209)(quoted in Wilder 2001: 516).

6 WT/DS/152/R, 22 December 1999.7 WT/DS160/R, 15 June 2000.8 WT/DS170/AB/R. 18 September 2000.9 See, for example, the World Trade Organisation statement on NGOs at http://

www.wto.org/english/forums_e/ngo_e/intro_e.htm (29 October 2001).10 The website for the International Forum on Globalization can be found at http:/

/www.ifg.org/ (11 September 2001).11 The website for Public Citizen can be found at http://www.citizen.org/ (11

September 2001).12 Nevertheless, a flaw in the arguments of those opposing the TRIPs Agreement

is that the gathering of empirical evidence to support propositions concerningthe costs and benefits of developing country compliance with the TRIPsAgreement has been ‘largely lacking’ (Bronckers 1994: 1248), although a notablerecent exception is Maskus (2000).

13 ‘Oxfam Urges Charitable Stance on Drugs Patents’, Financial Times, 12 February2001, p. 6; ‘Drugs Companies in Challenge to South Africa Over Patent Rights’,Financial Times, 5 March 2001, p. 11.

14 A joint WHO/WTO/Norwegian Foreign Affairs Ministry/Global Health Councilworkshop was held at Hosbjor, Norway, from 8 to 11 April 2001 to discuss‘Differential Pricing and Financing of Essential Drugs’. At the meeting, attendedby experts rather than government representatives, participants called forimproved funding for essential drugs in developing countries. The final reportof the workshop is available on the World Trade Organisation website at: http://www.wto.org/english/tratop_e/trips_e/tn_hosbjor_e.htm#finalreports (23August 2001).

15 ‘The Economics of Essential Medicine’ seminar held at the Royal Institute ofInternational Affairs, Chatham House, London on 10 July 2001.

16 A report on the first discussion of the TRIPs Council on ‘Intellectual Propertyand Access to Medicines’ that took place on 20 June 2001 can befound on the WTO website at: http://www.wto.org/english/tratop_e/trips_e/counciljun01_e.htm (20 October 2001).

17 A report on the second discussion of the TRIPs Council on ‘Intellectual Propertyand Access to Medicines’ that took place 19 and 21 September 2001 can be foundon the WTO website at: http://www.wto.org/english/tratop_e/trips_e/councilsep01_e.htm (12 October 2001).

18 WT/MIN(01)/DEC/W/2.19 Reichman does, however, acknowledge that there is a countervailing risk that a

developed country, such as the United States, might resort to unilateral pressuresunder Section 301 or a similar measure in other developed countries (Reichman1998: 598).

Notes 187

20 WT/GC/W/115, 19 November 1998.21 WT/GC/W/193, 2 June 1999.22 A copy of the WIPO Copyright Treaty is available on the World Intellectual

Property Organisation website at http://www.wipo.int/treaties/ip/copyright/index.html (7 September 2001).

23 A copy of the WIPO Performances and Phonograms Treaty is available on theWorld Intellectual Property Organisation website at http://www.wipo.int/treaties/ip/performances/index.html (7 September 2001).

24 A copy of the Digital Millennium Copyright Act is available on the ElectronicFrontier Foundation website at http://www.eff.org/ip/DMCA/hr2281_dmca_law_19981020_pl105–304.html (7 September 2001).

25 WT/GC/W/242, 6 July 1999.26 At the first special session of the TRIPs Council on 8 March 2002 WTO Members

embarked on a two-phase programme for completing negotiations on amultilateral registration system for geographical indications for wines and spirits,see http://www.wto.org/english/news_e/news02_e/trips_ss_020308_e.htm (27March 2002). A review of Article 27.3(b) was discussed in the TRIPs Council on5–7 March 2002), when attention focused on organising the work programme,see http://www.wto.org/english/news_e/news02_e/trips_reg_020307_e.htm (27March 2002).

27 See http://www.biodiv.org/ (7 September 2001).28 WT/GC/W/225, 2 July 1999.29 WT/GC/W/302.30 WT/GC/W/282.

Appendix

1 When ‘nationals’ are referred to in this Agreement, they shall be deemed, inthe case of a separate customs territory Member of the WTO, to mean persons,natural or legal, who are domiciled or who have a real and effective industrial orcommercial establishment in that customs territory.

2 In this Agreement, ‘Paris Convention’ refers to the Paris Convention for theProtection of Industrial Property; ‘Paris Convention (1967)’ refers to theStockholm Act of this Convention of 14 July 1967. ‘Berne Convention’ refers tothe Berne Convention for the Protection of Literary and Artistic Works; ‘BerneConvention (1971)’ refers to the Paris Act of this Convention of 24 July 1971.‘Rome Convention’ refers to the International Convention for the Protection ofPerformers, Producers of Phonograms and Broadcasting Organizations, adoptedat Rome on 26 October 1961. ‘Treaty on Intellectual Property in Respect ofIntegrated Circuits’ (IPIC Treaty) refers to the Treaty on Intellectual Propertyin Respect of Integrated Circuits, adopted at Washington on 26 May 1989. ‘WTOAgreement’ refers to the Agreement Establishing the WTO.

3 For the purposes of Articles 3 and 4, ‘protection’ shall include matters affectingthe availability, acquisition, scope, maintenance and enforcement of intellectualproperty rights as well as those matters affecting the use of intellectual propertyrights specifically addressed in this Agreement.

4 Notwithstanding the first sentence of Article 42, Members may, with respect tothese obligations, instead provide for enforcement by administrative action.

5 For the purposes of this Article, the terms ‘inventive step’ and ‘capable ofindustrial application’ may be deemed by a Member to be synonymous with theterms ‘non-obvious’ and ‘useful’ respectively.

6 This right, like all other rights conferred under this Agreement in respect of theuse, sale, importation or other distribution of goods, is subject to the provisionsof Article 6.

188 Notes

7 ‘Other use’ refers to use other than that allowed under Article 30.8 It is understood that those Members which do not have a system of original

grant may provide that the term of protection shall be computed from the filingdate in the system of original grant.

9 The term ‘right holder’ in this Section shall be understood as having the samemeaning as the term ‘holder of the right’ in the IPIC Treaty.

10 For the purpose of this provision, ‘a manner contrary to honest commercialpractices’ shall mean at least practices such as breach of contract, breach ofconfidence and inducement to breach, and includes the acquisition of undisclosedinformation by third parties who knew, or were grossly negligent in failing toknow, that such practices were involved in the acquisition.

11 For the purpose of this Part, the term ‘right holder’ includes federations andassociations having legal standing to assert such rights.

12 Where a Member has dismantled substantially all controls over movement ofgoods across its border with another Member with which it forms part of acustoms union, it shall not be required to apply the provisions of this Section atthat border.

13 It is understood that there shall be no obligation to apply such procedures toimports of goods put on the market in another country by or with the consent ofthe right holder, or to goods in transit.

14 For the purposes of this Agreement:(a) ‘counterfeit trademark goods’ shall mean any goods, including packaging,

bearing without authorization a trademark which is identical to thetrademark validly registered in respect of such goods, or which cannot bedistinguished in its essential aspects from such a trademark, and whichthereby infringes the rights of the owner of the trademark in question underthe law of the country of importation;

(b) ‘pirated copyright goods’ shall mean any goods which are copies madewithout the consent of the right holder or person duly authorized by theright holder in the country of production and which are made directly orindirectly from an article where the making of that copy would haveconstituted an infringement of a copyright or a related right under the lawof the country of importation.

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Index

about this book: argument 1–3; outline3–6

acquisition/maintenance of rights 48,71–2, 168

ACTPN (Advisory Committee on TradePolicy and Negotiations) 18–19, 22,24

administrative procedures(enforcement) 67–8, 160–3

agreement text: acquisition/maintenance of rights 168;administrative procedures(enforcement) 160–3; anti-competitive practices 158–9;applications for patents 153;assignment of trademarks 148;availability of property rights144–59; Berne Convention:relationship to 144; bordermeasures: special requirements164–7; broadcasting organisations(copyright protection) 145–6; civilremedies 160–3; computer programs(copyright protection) 144;contractual licences: anti-competitive practices 158–9;conventions on intellectual property141; copyright (and related rights)144–6; copyright works: protectionterm 145; Council on Trade-RelatedAspects of Intellectual PropertyRights (TRIPs Council) 171;criminal procedures 167; customsauthorities, suspension of release by164; damages 161–2; datacompilations (copyright protection)144; disputes: settlement of 168–70;enforcement 159–67; evidence ofinfringement 160–1; ex officio actionon suspended goods 166–7;

exceptions: protection forgeographical indications 150–1;exceptions: rights conferred bypatents 154; exceptions: rightsconferred by trademarks 147;exhaustion of rights 143; existingsubject matter: protection of 172–3;fair and equitable enforcementprocedures 160; forfeit of patentprotection 155; general provisions/basic principles 46–9; geographicalindications 148–51; imports deminimis 167; indemnification,defendants 162–3; indemnification:suspended goods 166; industrialdesigns 151–2; infringement:judicial remedies on 161–2;injunctions 161; inspection ofsuspended goods: right of 166;institutional arrangements: finalprovisions 171–4; integrated circuits,protection term 157; integratedcircuits: topographies of 156–7;international cooperation 171–2;IPIC Treaty: relationship with 156;least-developed countries 170–1;licensing of trademarks 148;limitations/exceptions to exclusiverights 145; maintenance ofprotection: multinationalagreements 48; matter patentable152–3; matter protectable bytrademark 146–7; most-favoured-nation treatment 142–3;multilateral agreements,acquisition/maintenance ofprotection 143; national treatment142; objectives 140–1, 143;obligations: nature and scope 141;patent protection term 155; patents

Index 197

152–6; performers’ rights (copyrightprotection) 145–6; phonograms(copyright protection) 145–6;preamble 140–1; principles 143;process patents: burden of proof156; protection of existing subjectmatter 172–3; provisional measures163–4; rental rights (copyrightworks) 144; reservations 174; reviewand amendment 173–4; revocationof patent protection 155; right ofinformation 162; rights conferred bypatents 153; rights conferred bytrademarks 147; scope of propertyrights 144–59; security exceptions174; security for release ofsuspended goods 165; spirits,geographical indication 149–50;suspension of release by customs164–6; technical cooperation 171;trademark protection term 147;trademarks 146–8; transitionalarrangements 170; transparency168–9; unauthorised use ofintegrated circuits 157;unauthorised use of patents 154–5;undisclosed information 158; use ofproperty rights 144–59; userequirement for trademarks 148;wines: geographical indication 149–50

agricultural chemical products: mailboxprotection 96–100

ANDA (Abbreviated New DrugApproval) 100

Anell, Lars 29, 36, 38anti-competitive practices: control of

65, 158–9anti-counterfeiting: coalitions 13–14;

code 8–9appellations of origin 56applications for patents: conditions for

59, 153ASEAN (Association of South East

Asian Nations) 122assessments: content of TRIPs 76–7;

future of TRIPs 139; impact ofTRIPs on developing countries 122;implementation of TRIPs 106–7;negotiating TRIPs 44–5; origins ofTRIPs 27–8

assignment of trademarks 55–6, 148Attaway, Fritz 19availability of property rights 50–65,

144–59

Bale, Harvey E. Jr 13, 97, 98Barshefsky, Charlene 26BDI (Federation of German Industries)

22Bello, Judith 93Berne Convention 10–12, 47, 50–1, 106,

144bilateral negotiations 16bilateral trade tensions 111Bolar exemptions 100–5border measures 69–71, 164–7Brittan, Sir Leon 129broadcasting organisations (copyright

protection) 52–4, 145–6Brussels Draft 37–9BSA (Business Software Alliance) 43,

105bureaucratic complexity (of TRIPs

Council) 80–2business: involvement during Uruguay

Round 43–4; strategy 12–14; support18–19; transatlantic dialogue 124–5

Canadian Patent Act 101–3, 129Carl, Peter 39CBD (UN Convention on Biodiversity)

138CBI (Confederation of British

Industries) 22Chairman’s Draft 36–7Chicago Declaration see TABDCIROAP (Consumers International

Regional Office for Asia and thePacific) 114

CIS (Commonwealth of IndependentStates) 120

civil remedies 67–8, 160–3Cohen, Abraham 19compromise text: emergence of 34–6computer programs (copyright

protection) 51–2, 144consensus: fragmentation of 105–6,

127–8content of TRIPs: acquisition/

maintenance of rights 71–2;acquisition of protection:multinational agreements 48;administrative procedures(enforcement) 67–8; anti-competitive practices: control of 65;appellations of origin 56;applications for patents: conditionsfor 59; assessment 76–7; assignmentof trademarks 55–6; availability of

198 Index

rights 50–65; Berne Convention:relationship to 50–1; bordermeasures: special requirements for69–71; broadcasting organisations(copyright protection) 52–4; civilremedies 67–8; computer programs(copyright protection) 51–2;contractual licences: anti-competitive practices 65;conventions on intellectual property47; copyright (and related rights)50–4; Council on Trade-RelatedAspects of Intellectual PropertyRights (TRIPs Council) 74; criminalprocedures 71; customs authorities:suspension of release by 69–70;damages 68; data compilations(copyright protection) 51–2;disputes: settlement of 72;enforcement 65–71; evidence ofinfringement 67; ex officio action onsuspended goods 70; exceptions:protection for geographicalindications 56–7; exceptions: rightsconferred by patents 59–60;exhaustion of rights 48–9; existingsubject matter: protection of 75; fairand equitable enforcementprocedures 67; forfeit of patentprotection 61; general provisions/basic principles 46–9; geographicalindications 56–7; imports de minimis71; indemnification: defendants 68;indemnification: suspended goods70; industrial designs 57; injunctions67; inspection of suspended goods:right of 70; institutionalarrangements and final provisions74–6; integrated circuits:topographies of 62–4; internationalcooperation 74–5; IPIC Treaty:relationship with 62–3;least-developed countries 73–4;licensing of trademarks 55–6;limitations/exceptions to exclusiverights 52; maintenance ofprotection: multinationalagreements 48; matter patentable57–9; matter protectable bytrademark 54; most-favoured-nationtreatment 48; national treatment47; objectives 49; obligations: natureand scope 46–7; patents 57–62;performers’ rights (copyrightprotection) 52–4; phonograms

(copyright protection) 52–4; pipelineprotection 62; principles 49; processpatents: burden of proof 61–2;protection of existing subject matter75; protection term ( trademarks)55; protection term (copyrightworks) 52; protection term(integrated circuits) 63–4;protection term (patents) 61;provisional measures 69; re-exportof counterfeit goods 70; rental rights(copyright works) 52; reservations76; review and amendment 76;revocation of patent protection 61;right of information 68; rightsconferred by patents 59; rightsconferred by trademarks 55; scope ofrights 50–65; security exceptions 76;security for release of suspendedgoods 69–70; spirits: geographicalindication 56; suspension of releaseby customs 69–70; technicalcooperation 74; trademarks 54–6;transitional arrangements 72–4;transparency 71–2; unauthorised useof integrated circuits 63;unauthorised use of patents 60–1;undisclosed information 64–5; use ofrights 50–65; use requirement fortrademarks 55; wines: geographicalindication 56

contractual licences: anti-competitivepractices 65, 158–9

conventions on intellectual property141

Copyright Act (UK) 13Copyright Act (US) 106, 129Copyright Alliance 13copyright protection: and related rights

50–4, 144–6; sound recordings 95Council on Trade-Related Aspects of

Intellectual Property Rights (TRIPsCouncil) 74, 78–83, 171

counterfeit trademark goods 188criminal procedures 71, 167customs authorities: suspension of

release by 69–70, 164Cyprus (Patent) Bill 104–5

damages 68, 161–2data compilations (copyright

protection) 51–2, 144developed countries: disputes in 129–30;

renegotiation priorities 136developing countries: affordable

Index 199

pharmaceuticals, access to 114–16;assessment of TRIPs for 122;beneficial effects 108–13; bilateraltrade tensions 111; costs of TRIPsfor 113–17; draft proposalssubmitted by 35–6; EC view on 81;enforcement: a challenge for 117–18;foreign direct investment 109–10;hostility to inclusion of propertyprotection in GATT 17; limitationson benefits 111–13; localinvestment: incentive structure for110–11; outcomes for TRIPspredicted 118–19; overcomingopposition 31–3; patentingindigenous knowledge 116–17;renegotiation priorities 137–8;technical assistance 119–22;technology transfer 110; see also G10

Digital Millennium Copyright Act (US)136

diplomacy: limits of 128–9dispute settlement: articles concerning

72, 168–70; Panels 135; procedures87–95

Doha Development Round 2–3, 135Doha Ministerial Conference (2001)

133–5Draft Final Act 42–3DSB (Dispute Settlement Body) 88, 98,

106, 115, 129DSU (Dispute Settlement

Understanding) 88, 96Dunkel, Arthur 39, 42Dunkel Draft 39–42

EC (European Communities): businessinput from 43; description of term175; developing countries 121–2;differences with US 35, 106;diplomatic constraints 128–9;Dispute Settlement Procedure 89–91;first phase of negotiations 30; first-to-file system for patents 58–9;global scrutiny and surveillance 83–7;India: establishment of panel on183–4; need for protection,understanding of 28; priorities ofdeveloped countries 136

EFPIA (European Federation ofPharmaceutical IndustryAssociations) 87, 97, 99, 182

Eli Lilly v. Teva Pharmaceutical IndustriesLtd 103–4

EMEA (European Medicines EvaluationAgency) 62, 64

enforcement: articles concerning 65–71, 159–67; challenge of (fordeveloping countries) 117–18; lackof 21–2

Enforcers of IPR in India Ltd 118Enyart, James R. 18Essential Drugs List (WTO) 116evidence of infringement 67, 160–1ex officio action 70, 166–7exceptions: on protection for

geographical indications 56–7, 150–1;to rights conferred by patents 59–60,154; to rights conferred bytrademarks 147

exemptions (Bolar provisions for) 100–5exhaustion of rights 48–9, 143existing subject matter, protection of

75, 172–3

FDA (Food and Drug Agency) 62, 64first-to-file system for patents 58–9foreign direct investment 109–10forfeit of patent protection 61, 155future of TRIPs: assessment 139;

consensus: fragmentation on 127–8;developed countries: disputes in129–30; developed countries:renegotiation priorities 136;developing countries: renegotiationpriorities 137–8; diplomacy: limits of128–9; Dispute Settlement Panels135; industry: new actors within 131;institutions as gatekeepers 128–9;international institutions: newactors within 133–5; IPC(Intellectual Property Committee)125–6; limiting the scope of TRIPs135; ‘Millennium timebomb’ 125–6;new entries 130–5; non-governmental organisations: newactors within 131–2; outcomespredicted 138–9; pharmaceuticalindustry 126–7; pipeline protection126–7; protection certificates:supplementary 126–7; renegotiationof TRIPs 135–8; transatlanticbusiness dialogue 124–5; UruguayRound 124–8; WTO Members: newactors within 132–3

gatekeepers: institutions as 128–9GATT (General Agreement on Tariffs

and Trade): basic framework ofprovisions 24, 43–4; ministerialdeclaration (1986) 17; ministerial

200 Index

meeting (1982) 9–10; ministerialmeeting (1989) 34; see also DohaDevelopment Round; Tokyo Round;Uruguay Round

geographical indications 56–7, 148–51global corporate actors 83–7, 89–95global corporate consensus:

fragmentation of 105–6Globalization: International Forum on

131Gorlin, Jacques 20, 24, 28, 39, 126Gorlin Draft 125–6GSP (Generalized System of

Preferences) 15, 27G10 (Group of Ten Developing

Countries) 17, 24, 32, 38

Hatch–Waxman Act (1984) 100–1

IFPI (International Federation ofPhonographic Industries) 52–3, 95

IIPA (International IntellectualProperty Alliance) 20–1, 24, 26, 40,43, 53, 91–3, 121

implementation of TRIPs: agriculturalchemical products, mailboxprotection for 96–100; assessment106–7; copyright protection: soundrecordings 95; Dispute SettlementProcedure 87–95; exemptions (Bolarprovisions for) 100–5; globalcorporate actors 83–7, 89–95; globalcorporate consensus: fragmentationof 105–6; mailbox protection 96–100; pharmaceutical products:mailbox protection for 96–100;scrutiny/surveillance 79–87; soundrecordings: copyright protection of95; stockpiling 100–5; TRIPs Council78–83

imports de minimis 71, 167indemnification: of the defendant 68,

162–3; for suspended goods 70, 166Indian Patent Office 97–9indigenous knowledge: patents for 116–

17industrial designs 57, 151–2industry: new actors within 131infringement: evidence of 67, 160–1;

judicial remedies on 161–2injunctions 67, 161inspection of suspended goods: right of

70, 166institutional arrangements: final

provisions 74–6, 171–4

INTA (International TrademarkAssociation) 92

integrated circuits: topographies of 62–4, 156–7

intellectual property: conventionsconcerning 47; perceptions of rightsto 8

International Affairs: Royal Institute of133

international cooperation 74–5, 171–2international institutions: new actors

within 133–5Interpat 99, 182investment: incentive structure for

local 110–11IPC (Intellectual Property Committee)

20, 22–5, 43, 91–2, 125–6IPIC (Intellectual Property in Respect

of Integrated Circuits) Treaty 47,62–4, 67, 156

ISACs (Industry Specific AdvisoryCommittees) 91

Israeli Patent Amendment 103–4

Japan 22, 23, 43, 95, 136

Keidanren (Federation of EconomicOrganizations, Japan) 22, 23, 43

Kirk, Michael 39

least-developed countries 73–4, 170–1licensing of trademarks 55–6, 148limitations: on benefits for developing

countries 111–13; and exceptions toexclusive rights 52, 145; on scope ofTRIPs 135

mailbox protection 96–100Manbeck Compromise 58marketing rights: exclusivity of 183matter patentable 57–9, 152–3matter protectable by trademark 54,

146–7‘Millennium timebomb’ 125–6MITI (Ministry of International Trade

and Industry, Japan) 22, 23most-favoured-nation treatment 48,

142–3MPAA (Motion Picture Association of

America) 41, 106multinational agreements: acquisition

of protection 48; maintenance ofprotection 143

Index 201

national treatment 47, 142negotiating TRIPs: assessment 44–5;

Brussels Draft 37–9; businessinvolvement during Uruguay Round43–4; Chairman’s Draft 36–7;compromise text: emergence of 34–6; developing country opposition:overcoming 31–3; Draft Final Act42–3; Dunkel Draft 39–42; firstphase 30; ministerial meeting(Geneva, 1989) 34

NMPA (National Music Publishers’Association) 53

non-governmental organisations(NGOs): new actors within 131–2

objectives of agreement 49, 140–1, 143obligations: nature and scope of

agreement 46–7, 141Omnibus Trade and Tariff Act (1988)

25–7Opel, John 18, 20, 24origins of TRIPs: anti-counterfeiting

code 8–9; assessments 27–8;bilateral negotiations 16; businessstrategy for protection 12–14;business support 18–19; GATTministerial meeting (1982) 9–10;IIPA (International IntellectualProperty Alliance) 20–1, 24;intellectual property rights:perceptions of 8; IPC (IntellectualProperty Committee) 20, 22–5;ministerial declaration (1986) 17;Omnibus Trade and Tariff Act(1988) 25–7; Tariff and Trade Act(1930) 14–15; Trade Act (1984) 15–16, 32–3; Uruguay Round,preparations for 16–17; watershed(1984) 12; WIPO conventions,attempts to revise 10–12

Otten, Adrian 39, 80outcomes predicted: in developing

countries 118–19; on future of TRIPs138–9

PA (Publishers’ Association) 13, 27–8Paris Convention 10–12, 47, 64Patent [Amendment] Ordinance

(India, 1994/99) 97–9Patent and Trademark Office (US) 35patents: articles concerning 57–62,

152–6; litigation: cost of 180performers’ rights (copyright

protection) 52–4, 145–6PHARE programme 122pharmaceutical industry: future of

TRIPs for 126–7; mailbox protectionfor products of 96–100; organisationof 175–6, 178

phonograms (copyright protection)52–4, 145–6

PhRMA (Pharmaceutical Research andManufacturers of America) 26, 43,93, 96–7, 99, 183

pipeline protection 62, 126–7piracy of copyright works 21, 188‘Piracy of US Copyrighted Works in Ten

Selected Countries’ (IIPA) 21Pratt, Ed 18, 20, 24, 44–5preamble to agreement 140–1principles of agreement 49, 143process patents, burden of proof 61–2,

156prospects see future of TRIPsprotection of existing subject matter

75, 172–3; supplementarycertificates 126–7; term forcopyright works 52, 145; term forintegrated circuits 63–4, 157; termfor patents 61, 155; term fortrademarks 55, 147

provisional measures 69, 163–4Public Citizen 131

Quad Group 38–9

re-export of counterfeit goods 70release of goods: suspension by customs

69–70, 164renegotiation of TRIPs 135–8rental rights (copyright works) 52, 144reservations: consent on 76, 174review and amendment 76, 173–4revocation of patent protection 61, 155RIAA (Recording Industry Association

of America) 53, 95rights: conferred by patents 59, 153;

conferred by trademarks 55, 147;right of information 68, 162; scopeof 50–65, 144–59

Roche v. Bolar Pharmaceuticals Co. Inc. 100Rome Convention 47, 53–4

SACIP (Standing Advisory Committeeon Industrial Property) 86–7, 182

scrutiny/surveillance 79–87Section 301 see Trade Act (1984)

202 Index

security: exceptions on 76, 174; forrelease of suspended goods 69–70, 165

Sell, Susan 26–7Smith, Eric 20, 24Software Publishers Association 26sound recordings: copyright protection

of 95South African Medicines and Related

Substances Control Act (1997) 115Special 301 see Omnibus Trade and

Tariff Act (1988)spirits: geographical indication 56,

149–50stockpiling 100–5suspension of release by customs 69–70,

164–6

TABD (Transatlantic BusinessDialogue) 124–5, 130, 132

TACIS (Technical Assistance to theCIS) 122

Tariff and Trade Act (1930) 14–15technical cooperation: articles

concerning 74, 171; assistance fordeveloping countries 119–22

technology transfer 110terms of protection see protectiontext of agreement see agreement textTokyo Round 9, 15TPRG (Trade Policy Review Group) 94TPSC (Trade Policy Staff Committee)

94Trade Act (1984) 15–16, 111Trade Estimates Report: US National

25trademarks 54–6, 146–8Trainer, Tim 139transitional arrangements 72–4, 170transparency 71–2, 168–9TRIPs Council 74, 78–83, 171

UCC (Universal CopyrightConvention) 16, 176

UN/ECE (UN Economic Commissionfor Europe) 120

unauthorised use of: integrated circuits63, 157; patents 60–1, 154–5

UNCTAD (UN Conference on Tradeand Development) 11, 112, 134

undisclosed information 64–5, 158UNICE (Union of Industrial and

Employers’ Confederation ofEurope) 22–4, 43, 125–6

United States: representation of seeUSTR

UPOV Convention 59, 132Uruguay Round: business involvement

during 43–4; consensus: will it hold?124–8; developing countryopposition 31–3; intellectualproperty, getting it accepted on22–3, 28; issues not resolved by 181;negotiating plan 29; origins ofTRIPs 1–2; preparations for 16–17

USPTO (US Patent and TrademarkOffice) 116–17

USTR (United States TradeRepresentative): business input 43;differences with EC 35, 106;diplomacy: limitations of 128–9;dispute settlement procedure 89,91–5; global scrutiny andsurveillance 86–7; multilateralnegotiating strategy 22, 24;overcoming developing countryopposition 31, 32; Section 301 ofTrade Act (1984) 15–16; Special 301of Omnibus Trade and Tariff Act(1988) 25–7

utilisation: of property rights 50–65,144–59; requirement for trademarks55, 148

Walter, Ralf 39, 42Washington Treaty see IPIC Treatywatershed (1984) 12WHO (World Health Organization)

133–4wines: geographical indication 56,

149–50WIPO (World Intellectual Property

Organisation): conventions,attempts to revise 10–12;conventions: ‘toothless’ nature of 13;protection for pharmaceuticals: listof countries not providing 185;technical assistance for developingcountries 119–21; watershed for(1984) 12; see also Berne Convention;Paris Convention

WTO (World Trade Organisation): newactors within membership 132–3;technical assistance for developingcountries 119–21

Yeutter, Clayton 28

globalising intellectual property rights

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