(This is the first part of a two part article)
IDEAS AND innovation are an increasingly important part of trade. Most of the value of new medicines and other high technology products lies in the amount of invention, research, design and testing involved in the production process.
Films, music recordings, books, computer software and on-line services are bought and sold because of the information and creativity they contain, not usually because of the plastic, metal or paper used to make them.
Many products that were previously traded as low-technology goods or commodities now contain a higher proportion of invention and design in their value - for example brand named clothing or new varieties of plants.
Creators can be given the right to prevent others from using their inventions and designs. These rights are known as "intellectual property rights" and may take a number of forms.
For example books, paintings and films come under copyright; inventions can be patented while brand names and product logos can be registered as trademarks.
With the imminence of the completion of WTO negotiations in 2005, businesses and the general public need to be aware of how these rights will be protected and enforced both here and elsewhere.
Prior to WTO's Agreement on Intellectual Property Rights, the extent of protection and enforcement of these rights varied widely around the world.
SOURCE OF TENSION
However, as intellectual property became more important in trade, these differences became a source of tension in international economic relations. New internationally-agreed trade rules for intellectual property rights were seen as a way to introduce more order and predictability and for disputes to be settled more systematically.
The 1986-1994 Uruguay Round of Negotiations sought to achieve just that, when an agreement on Trade-Related Aspects of intellectual Property Rights (TRIPS) was settled.
The TRIPS Agreement is an attempt to narrow the gaps in the way intellectual property rights are protected around the world. It is also an attempt to bring these rights under common international rules.
Where there are trade disputes over intellectual property rights, the WTO's dispute settlement system is now available. The agreement covers several broad issues: Firstly, the agreement deals with how basic principles of the trading system and other international intellectual property agreements should be applied. As in the General Agreement on Tariffs and Trade (GATT) and the GATS (General Agreement on Trade in Services), the starting point of the TRIPS agreement is the basic principle of non-discrimination.
The idea of non-discrimination rests upon two fundamental provisions: (1) national treatment and (2) most favoured nation treatment (MFN). National treatment imposes an obligation on each country to treat foreigners no less equally than its own nationals.
MFN treatment requires equal treatment for nationals of all trading partners in the WTO. National treatment is also a key principle in other intellectual property agreements outside the WTO.
The second part of the TRIPS agreement looks at different kinds of intellectual property rights and how to protect them. The purpose is to ensure that adequate standards of protection exist in all member countries. The main areas in which protection is offered are as follows:
Copyright: The TRIPS agreement ensures that computer programmes will be protected as literary works under the Berne Convention for the Protection of Literary and Artistic Works.
It also expands international copyright rules to cover rental rights. It is the general rule that authors of computer programmes and producers of sound recordings have a right to prohibit the commercial rental of their works to the public and this right must be protected.
A similar exclusive right applies to films where commercial rental has led to widespread copying, affecting copyright-owners' potential earnings from their films.
BOOTLEGGING
The agreement provides that performers also have the right to prevent unauthorised recording, reproduction and broadcast of live performances (bootlegging) for no less than 50 years. Producers of sound recordings have the right to prevent the unauthorised reproduction of recordings for a period of 50 years.
Trademarks: The agreement defines the types of signs which are eligible for protection as trademarks, and what the minimum rights conferred on their owners should be. Service marks are to be protected in the same way as trademarks used for goods.
Marks that have become well-known in a particular country enjoy additional protection. Geographical indications: Place names are sometimes used to identify a product. Well-known examples include "Appleton" "Champagne", "Scotch" and "Tequila". Wine and spirit makers are particularly concerned about the use of place-names to identify products, and the TRIPS agreement contains special provisions for these products.
The use of a place name to describe a product in this way is known as a "geographical indication" and usually identifies the products geographical origin and its characteristics. In this regard, using a place name when the product was made elsewhere or when it does not have the usual characteristics can mislead consumers and lead to unfair competition.
The agreement provides higher levels of protection for wines and spirits, that is, protection is not precluded merely because there is no danger of the public being misled. It must be noted however, that some exceptions are allowed. For example, if the name is already protected as a trademark or if it has become a generic term such as "cheddar" which refers to a particular type of cheese not necessarily cheese made in Cheddar.
INDUSTRIAL DESIGNS
Industrial designs: Under the TRIPS agreement, industrial designs must be protected for at least 10 years. Owners of protected designs must be able to prevent the manufacture, sale or importation of articles bearing or embodying a design which is a copy of the protected design.
Patents: The agreement provides that patent protection must be available for inventions for at least 20 years. Patent protection must be available for both products and processes, in almost all fields of technology. Governments can however refuse to issue a patent for an invention if its commercial exploitation is prohibited for reasons of public order or morality.
They can also exclude diagnostic, therapeutic and surgical methods, plants and animals (other than microorganisms), and biological processes for the production of plants or animals (other than microbiological processes). The agreement describes the rights that a patent owner must enjoy, albeit with certain exceptions.
COMPULSORY LICENCES
A patent-owner could abuse his rights, for example by failing to supply the product on the market. To deal with that possibility, the agreement provides that governments can issue "compulsory licences", allowing a competitor to produce the product or use the process under licence. However, this can only be done under certain conditions aimed at safeguarding the legitimate interests of the patent-holder.
If a patent is issued for a production process, then the rights must extend to the product directly obtained from the process. Under certain conditions alleged infringers may be ordered by a court to prove that they have not used the patented process. Part 3 of TRIPS covers enforcement and dispute settlement.
PENALTIES FOR INFRINGEMENT
The agreement provides that governments should ensure that intellectual property rights can be enforced under their laws, and that the penalties for infringement are tough enough to deter further violations. The procedures must be fair and equitable, and not unnecessarily complicated or costly. They must not entail unreasonable time-limits or unwarranted delays. Judicial Review of administrative decision or the right of appeal a lower court's ruling should also be available.
The agreement describes in some detail how enforcements have to be handled, including rules for obtaining evidence, provisional measures, injunctions, damages and other penalties.
The Agreement further provides that courts must have the right, under certain conditions, to order the disposal or destruction of pirated or counterfeit goods. Wilful trademark counterfeiting or copyright piracy on a commercial scale must be criminal offences.
Governments have to make sure that intellectual property rights owners can receive the assistance of customs authorities to prevent imports of counterfeit and pirated goods.
