Trade-Related
Intellectual Property Rights
New
minimum standards
 
The
standards agreed in TRIPS incorporate and extend to all WTO Members
the substantive obligations of the main World Intellectual
Property Organization (WIPO) conventions:
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the Berne Convention on copyright, and
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the Paris Conventions industrial property.
TRIPS
also contains obligations on matters not covered by the WIPO Conventions.
This involves, in particular,
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setting standards on categories of intellectual property
rights (IPRs) where they were lacking, for example, patents
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setting disciplines relating to the enforcement of IPRs,
and
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providing an effective dispute settlement mechanism.
The
TRIPS Agreement will require substantial changes to some developing
country legislation and enforcement regulations.
Enforcement
procedures
A
key feature of TRIPS is that Members are required to provide within
their national laws effective procedures and remedies for the enforcement
of the rights of intellectual property holders, mainly private enterprises.
Members are not, however, obliged to create a special judicial system
for the enforcement of IPRs.
Implementation
TRIPS
obligations may be progressively implemented, particularly
developing countries are required to adopt new or different legal
regimes for the protection of certain IPRs.
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Developed countries have one year to meet their obligations.
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Developing countries have five years.
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Least-developed countries have eleven years, with the possibility
of an extension.
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Special transitional arrangements apply where a developing
country does not presently provide patent protection in a particular
area, such as pharmaceuticals or agricultural chemicals.
Adherence
to the Paris and Berne Conventions was, in fact, widespread among
developing countries. Many developing countries already provide minimum
standards of intellectual property protection on a national treatment
basis, although the scope of such protection varies significantly.
Developing
country interests
Trade
flows
Most
goods and services that are traded are likely, at some stage of their
production or distribution, to embody intellectual property such as
patented processes, copyrighted material, protected commercial information
and trademarks.
Because
stronger, uniform protection of IP rights will reduce the transaction
costs of trade - such as the need to protect against imitation
- the TRIPS agreement is likely to lead to higher volumes of trade.
Two
sectors in which developing countries will directly benefit from
these increased flows are the IP-intensive 'high technology' trade
and trade in the goods and services of entertainment industries. These
sectors comprise rapidly growing and very valuable international trades.
For
example, over the period 1980-1994 high-tech products increased
their share of world trade from 12 to 24 per cent (Fink and Primo
Braga, 1999).
Information
technology (IT) trade alone was estimated to be worth more than $500
billion in 1995. According to WTO data, developing country exporters
accounted for almost 40 per cent of the exports of the world's top
ten IT exporters in 1995.
Transfer
of technology and FDI
Proponents
of the TRIPS agreement sometimes cited the potential for greater technology
transfer to, and investment in, developing countries as an argument
in favour of the new WTO regime.
Developing
countries' compliance with TRIPS provisions would be expected to allay
any concerns on the part of foreign investors about the security
of their intellectual property in the host country. The World Bank
study (Primo Braga 1995) points to emerging evidence that compliance
with TRIPS will be one of the factors accounting for the overall distribution
of international investment flows and the pattern of technology transfer.
Later
studies (eg Fink and Primo Braga 1999) indicate a positive relationship
between protection of IPRs and trade flows in non-fuel trade. High
technology trade flows, however, were not significantly affected by
increased IPR protection.
The
levels of foreign direct investment cannot, however, be guaranteed
to rise. The improvement in IPR protection in international trade
transactions may result in some substitution of trade for investment.
The incentive for rights holders to directly invest in developing
country markets - or to transfer technology there - as a means of
safeguarding their rights under specific domestic regimes may actually
be reduced by TRIPS implementation.
Rent
transfers
Developing
countries have been concerned about the possibility of larger royalty
income transfers because of TRIPS.
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Non-residents
account for the majority of patents granted in developing countries.
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The extension of patent regimes to pharmaceutical products is likely
to increase the proportion of offshore rights holders.
Recent
evaluation of the rent-transfer effect has shown, however,
that estimates of the transfers are sensitive to the structure of
the market before implementation of the TRIPS obligations. The size
of the transfers may be much less than first feared if the number
of local imitators of the patented product was small.
Also,
where rent transfers take place because of the grant of new patents
for pharmaceutical products, it is likely that the impact will be
delayed. It will probably be more than a decade after the date on
which developing countries that did not formerly do so must start
to grant pharmaceutical patents (2005) before the royalty transfers
would begin.
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