SEE NOTES

Module 06

Trips and Indian law:

What are intellectual property rights?

Intellectual property rights (IPR) are exclusive rights granted to individuals over their creative
works, including literary, artistic, scientific, and industrial designs. These non-tangible assets
enable creators to use and benefit from their creations for a set period. IPR plays a crucial role in
international trade, as recognized by the WTO’s TRIPS agreement, which sets minimum
standards for IPR protection among member countries, fostering competition and growth in
business.

How it all started?

As global commerce grew, the protection and enforcement of intellectual property rights varied
widely, causing tensions in international relations. To address this, the World Trade Organization
(WTO) was established in 1995, succeeding the General Agreement on Tariffs and Trade
(GATT). The WTO oversees trade agreements and ensures compliance among its 164 members.
The Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, effective
January 1, 1995, is a key component of these efforts to standardize intellectual property
protection globally.

General provisions and basic principles: Articles 3, 4, and 5 of TRIPS mandate national and
most-favored-nation treatment for all intellectual property rights, ensuring non-discrimination
among members. TRIPS covers protection, enforcement, and use of IPR while allowing
exceptions under WIPO treaties. Members can regulate IPR misuse to prevent trade barriers and
support technology transfer.

What is the TRIPS Agreement about?

The TRIPS Agreement establishes a comprehensive framework for intellectual property
protection, covering all areas with specific clauses, and is the first legal agreement to address
trade-related intellectual property rights.

The three main significant features governed by the agreement are:

1. Standard: TRIPS requires members to provide minimum IPR protection criteria for all
covered categories, detailing subject matter, granted rights, exceptions, and minimum
protection periods.
2. Enforcement: TRIPS mandates rules for IPR enforcement, covering civil,
administrative, and criminal procedures, border measures, and remedies to help rights
holders effectively protect their intellectual property.
3. Dispute Settlement: IPR disputes between WTO members under TRIPS are resolved
through the WTO’s dispute resolution mechanism.
Purpose of TRIPS Agreement: The preamble of TRIPS Agreement along with Article 7 clearly
lists out the purposes for the TRIPS agreement-

 Minimize distortions and barriers to international trade.

 Promote effective and sufficient protection of intellectual property rights.
 Ensure enforcement measures for IPR do not create obstacles to legitimate trade.

TRIPS AND INDIAN IP LAWS:

Copyrights and related rights: Copyright under the Agreement protects original works like
literary, musical, artistic, computer programs, and multimedia. It grants owners rights to control
duplication, distribution, and usage for at least 50 years. Originality doesn’t require innovation.

The Berne Convention safeguards computer programs and data compilations. Authors of
programs and films can approve or restrict rentals, but rental rights may be revoked if they harm
the work’s uniqueness through widespread copying.

Trademarks: Article 15 allows trademarks for any clear, distinguishable signs, including words,
symbols, colors, or combinations. Article 16 grants trademark owners exclusive rights to prevent
others from using similar signs for related products or services.

Geographical indications: Article 22 defines geographical indications as markers for goods

whose quality or reputation stems from their origin. These indicators link products to specific
regions, serve as reliable identifiers of quality, and are legally protected.

Industrial designs: Articles 25 and 26 protect independently created industrial designs for at
least 10 years. Right holders can prevent unauthorized commercial use, including production,
import, or sale of items using the protected design, extending beyond Paris Convention
provisions.

Patents: A patent is an intellectual property right granting inventors exclusive rights to prevent
others from using, selling, or importing their invention for 20 years. Exceptions to patentability
include inventions harmful to public morals, health, or the environment. Compulsory licenses for
medicines and specific exemptions are allowed under strict conditions.

Layout-Designs (Topographies) of Integrated Circuits: Under Article 36, importing, selling,

or distributing protected layout designs or integrated circuits for commercial purposes is
prohibited. Layout design protection lasts at least 10 years, with a maximum of 15 years from the
design's creation under Article 37.

Protection of undisclosed information: Trade secrets are confidential information with

commercial value, protected under Article 39 of TRIPS. Member states must legislate to prevent
unauthorized disclosure, use, or acquisition of such information, ensuring it remains secret,
valuable, and secured through reasonable efforts to align with fair trade practices.
Enforcement: The TRIPS Agreement requires fair, efficient enforcement of IPR to prevent
infringement. It details evidence collection, interim measures, damages, and penalties, including
disposal of infringing goods. Trademark counterfeiting and copyright piracy on a commercial
scale must be criminalized, with customs aiding to block counterfeit imports.

Prevention and resolution of conflicts resulting from the provision of the TRIPS
Agreement: The TRIPS Council oversees dispute resolution and prevention, requiring members
to notify laws and rulings under Article 63. Disputes are addressed through WTO’s settlement
procedures, as outlined in Article 64, with a register compiling relevant laws and decisions.

Transitional agreements: The TRIPS Agreement allowed countries phased implementation

from January 1, 1995, with varying timelines for compliance based on member nations' specific
circumstances.

Institutional arrangements: Article 68 establishes the TRIPS Council to oversee agreement

administration, ensure member compliance, facilitate consultations, assist in dispute resolution,
and gather relevant information to fulfill its responsibilities effectively.

Criticism of Trade-Related Aspects of Intellectual Property Rights:

 TRIPS mandates minimum IP protection but faces criticism for its impact on trade and
alignment with WTO principles.
 TRIPS restricts trade, conflicting with the WTO’s free-trade ideology.
 IP rights are territorial, governed by domestic laws; no global patent exists.
 The "one size fits all" approach is unsuitable for developing nations.
 Generic companies gain undue rights and protections without innovation.
 TRIPS intended for trans-border IP; focus shifted to domestic protections over time.

Principles of the international intellectual property regime

The Paris Convention of 1883 established early principles of intellectual property rights,
followed by the Berne Convention of 1886, which focused on the protection of literary and
artistic works.

The Paris and Berne Conventions were negotiated and amended over the years, culminating in
their incorporation into the TRIPS Agreement, effective January 1, 1995, after the Uruguay
Round negotiations.

The Paris Convention addresses industrial property, including patents, trademarks, industrial
designs, utility models, geographical indications, service marks, trade names, and measures
against unfair competition.
The Paris Convention was created with two goals, which are as follows;

 Prevent loss of patent eligibility by publishing 81 applications and participating in

international exhibitions before filing national patents.
 Harmonize diverse patent laws across countries to promote consistency in patent
protection.

BERNE CONVENTION:

In the nineteenth century, concerns about increased literary piracy led to greater interest in
international cooperation on intellectual property, initially through bilateral agreements. The
Berne Convention, ratified by eight countries in 1886, including France and Germany,
established national treatment and basic rights for authors. India joined in 1928. The convention
specifies minimum protection standards and allows for exceptional measures for developing
nations, ensuring authors' rights and the preservation of their works.

CASE LAWS:

The TRIPS Agreement significantly influences global IP laws, particularly in patents, making it
harder to obtain patents. In India, the Patents Act of 1970 allowed for the production of
affordable generic drugs, but this changed with the TRIPS-influenced Patents Act of 2005. Now,
inventors must disclose complete invention details, restricting others from manufacturing,
selling, or importing the patented products for 20 years, impacting the Indian pharmaceutical
sector and public health.

In the case of Roche vs. Cipla 2012: A dispute arose between Swiss healthcare company Roche
and Indian pharmaceutical company Cipla over the lung cancer drug Erlotinib, patented as
"Tarseva." Delhi High Court Justice Bhatt denied Roche's injunction against Cipla, citing the
drug's threefold price difference and the decision being in the public interest.

Impact on pharmaceutical sector - TRIPS restricts the patenting of generic drugs to protect
innovators, ensuring they benefit from their inventions. In India, where many cannot afford
medicines, the government utilizes TRIPS flexibilities and compulsory licensing to ensure access
to healthcare, while the judiciary seeks to balance patent rights with the fundamental right to
health.

Bayer Corporation v. Union of India (2012)

Facts: Bayer claimed patent rights on "Nexavar," a cancer treatment, but Natco sought a
compulsory license, arguing Bayer did not meet public demand for the medication.

Decisions: The Patent Controller noted that Bayer's drug cost Rs. 2,80,000 per month, making it
unaffordable. Additionally, Bayer had not manufactured the drug in India for four years, leading
to the granting of a compulsory license to Natco Pharma Ltd.
Impact of TRIPS: This decision marked a pivotal change in India’s compulsory licensing
approach, prioritizing affordability and access to essential medicines. It demonstrated India's
commitment to leveraging TRIPS mechanisms to balance innovation with public health needs for
life-saving drugs.