Print

Trips and Indian Intellectual Property law: A snapshot

Published: Sep 27, 2017

CA Sudha G Bhushan & Roshni Patel

"Forget land, buildings or machines the real source of wealth today is intelligence, APPLIED INTELLIGENCE. We talk glibly about intellectual property without taking on board what it really means. It isn't just patent rights or brand names, it is the brains of the place."

Charles Handy

THE World Trade Organization is the global international organization which deals with the rules of trade between member nations. There are 164 members nations which are part of WTO (as one 29 July 2016). The functions of WTO include implementing rules and provisions related to trade policy review mechanism, providing a platform to member countries to decide and negotiate future strategies related to trade and tariffs, providing facilities for implementation, administration and operation of multilateral and bilateral agreements of the world trade, administering the rules and processes related to dispute settlement between member nations, ensuring optimumutilization of world resources, assisting in international organizations such as, International Monetary Fund and International Bank for Reconstruction and Development for establishing coherence in Universal Economic Policy determination.The goal of WTO is to ensure that trade flows is smooth, predictable and free as much as possible.

WTO supports IPR regime under its leadership on the ground that intellectual property is very essential trade related asset. Itasserts that an international attempt is required to harmonise the laws relating to intellectual property as there are wide differences existing between the member nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world's trading nations and ratified in their parliaments. One of such agreements by WTO is TRIPs i,e.Trade-Related Aspects of Intellectual Property Rights.

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is an international legal agreement which establishes minimum standards to be followed in the field of Intellectual Property rights (IPRs) between all the member nations of the World Trade Organization (WTO). The TRIPS agreement introduced intellectual property law into the international trading system for the first time and remains the most comprehensive international agreement on intellectual property till date. Although the agreement is adopted in account of the WTO convention, the agreement gives members the freedom to determine the appropriate method of implementing the provisions of the agreement within their respective legal systems. The agreement thus takes into account the diversity of members legal frameworks.

Intellectual property rights are the rights given to persons over the creations of their minds. They usually give the creator an exclusive right over the use of his/her creation for a certain period of time

Intellectual propertyis divided into two categories:

- Firstly, Industrial Property which includes, patents for inventions,trademarks, industrial designs& geographical indications.

- Secondly, copyright which covers literary works (such as novels, poems and plays), films, music, artistic works (e.g. paintings, photographs and sculptures) and architectural design.

The objectives of the TRIPs Agreement (herein after also referred as "Agreement" )are essentially aimed at strengthening certain aspects of the protection of intellectual property including the following -

- To encourage and reward creative work

- To protect the investments in development of technology

- Promotion of technological innovation

- To stimulate and ensure fair competition

- Production and use of technological knowledge

- To facilitate transfer of technology in the form of Foreign Direct Investment, Joint Ventures and licensing

- To achieve the balance of rights and obligations between innovators/creators and the end users

- Lastly, to facilitate social and economic welfareof member countries

Structure of the TRIPs Agreement

The Agreement is divided into seven parts, each containing detailed articles touching different aspects of Intellectual Property rights. Following table gives a brief description of the structure of the Agreement:

Major issues governed under the Agreement

- Minimum standards of protection - Each area of the Intellectual Property covered by the Agreement imposes an obligation to provide a minimum set of standard protection to all member nations. Such area of IP clearly describes the main elements of protection i.e. the subject matter which seeks protection, rights which are to be conferred and permissible exceptions to such rights along with the minimum duration/term of protection.

- IPR enforcement procedure - Each member nation is obliged to provide domestic procedures and remedies with respect to protection of IPR. Further, the agreement lays down certain other provisions so that right holders can effectively enforce their rights. These provisions relate to civil and administrative procedures and remedies and detailed specifications as to special requirements related to border measures and criminal procedures.

- Dispute settlement and obligation of each member country - Any dispute arising out of or between members of WTO with regard to the obligation/s arising out of the TRIPs Agreement are subject to the WTO's dispute settlement procedures.

IPRs recognized under TRIPs

(a) Copyrights and Related rights: Copyright and related rights include laws which grant authors, artist and other creators a protection for their literary and artistic creations, generally referred to as works. A closely associated field is related rights or rights related to copyright that emcompass rights similar or identical to those of copyright, although sometimes more limited and of shorter duration e.g. the rights of performers, producers of sound recordings and broadcasting organizations, etc.

Member nations of WTO are obliged to comply with the substantive provisions of the Paris Act, 1971, Berne Convention for copyrights. Article 9 of the agreement which deals with Copyrights and related rights states that, Copyright protection shall extend to expressions and not to ideas, procedures, and methods of operation or mathematical concepts.

(b) Trademarks (also service marks)

Article 15 of the agreement states that

a trademark is any sign, or any combination of signs, capable of distinguishing the goods and services of one undertaking from those of other undertakings and must be eligible for registration as a trademark, provided that it is visually perceptible.

Such signs, in particular words including personal names, letters, numerals, figurative elements and combinations of colors as well as any combination of such signs, must be eligible for registration as trademarks.In case of well known marks members are obliged to refuse or to cancel the registration, and to prohibit the use of a mark conflicting with a mark which is well known.The registration and renewal of registration of a trademark shall be for a term of not less than seven years.

Cancellation of a mark on the grounds of non-use cannot take place before three years of uninterrupted non-use has elapsed unless valid reasons based on the existence of obstacles to such use are shown by the trademark owner.

The Agreement requires service marks to be protected in the same way as marks distinguishing goods.

(c) Geographical Indications(GI) (including appellations of origin)

Article 22 of the agreement deals with GI and it defines GI as,

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

Under the agreement, GI specifies that the quality, reputation or other characteristics of a good can each be a sufficient basis for eligibility as a GI, where they are essentially attributable to the geographical origin of the good.

The registration of a trademark which uses a GI in a way that misleads the public as to the true place of origin must be refused or invalidated ex officio if the legislation so permits or at the request of an interested party. Members are not obliged to bring a GI under protection, where it has become a generic term for describing the product in question.

(d) Industrial Designs

Article 25 & 26 deals with Industrial designs wherein theagreement allows members to provide for the protection of independently created industrial designs which are new/ original. Exceptionally the Article states that Members may provide designs which are not new or original if they do not significantly differ from known designs or combinations of known design features. Members are free to meet this obligation through industrial design law/copyright law of their respective nations.The duration of protection available in total shall be a minimum number of 10 years.

(e) Patents (including protection of new variety of plants)

Article 27 of the Agreement deals with patentable subject matter whereinmember countries are required to make patents available for any inventions, whether products or processes, in all fields of technology without discrimination, subject to the normal tests of novelty, inventiveness and industrial applicability. It is also required that patents be available and patent rights enjoyable without discrimination as to the place of invention and whether products are imported or locally produced

Process patent protection must give rights not only over use of the process but also over products obtained directly by the process. Patent owners shall also have the right to assign, or transfer by succession, the patent and to conclude licensing contracts. The term of protection available shall not end before the expiration of a period of 20 years counted from the filing date.

(f) Layout-designs of Integrated Circuits

As defined by World Intellectual Property office, Integrated circuits – commonly known as "chips" or "micro-chips" – are the electronic circuits in which all the components (transistors, diodes and resistors) have been assembled in a certain order on the surface of a thin semiconductor material (usually silicon). Article 36-38 of the agreement deal with Layout designs of Integrated Circuits.

The Agreement requires Member countries to protect the layout-designs of integrated circuits in accordance with the provisions of the IPIC Treaty (the Treaty on Intellectual Property in Respect of Integrated Circuits), negotiated under the auspices of WIPO in 1989. The protection provided in this field of IP is not less than 10 years from the date of filing of application for lay-out designs. However, member nations may limit the duration of protection up to fifteen years from the date of creation of the lay-out design.

(g) Undisclosed Information (Trade secrets and Test data)

Article 39 pertains to undisclosed information (also known as trade secret) and states that Natural and legal persons shall have the possibility of preventing information lawfully within their control from being disclosed to, acquired by, or used by others without their consent in a manner contrary to honest commercial practices so long as such information:

- Is not readily accessible to persons within the circles that normally deal with the kind of information in question,

- It has commercial value because it is secret, and

The information has been subject to steps for its maintenance as a secret by the person lawfully in control of the information.

Members are free to protect such data against disclosure except when it is necessary to protect the public, or unless any step is taken to ensure that the data is protected against unfair commercial use.

Benefits of the TRIPs Agreement

Major advantages of TRIPs include Trade facilitation and that local invention are fostered by private investment stimulation at higher levels of protection. TRIPs has been successful in removing distortions and impediments to international trade taking into account the need to promote competent and adequate protection of IPRs. It has also enhanced IP protections, promoted domestic creativity and lastly it is headed towards higher value-added production of IPRs leading to more open and market-based policies.The standard line in support of TRIPs rooted from recognition of the potential significance of the knowledge economy, and private intellectual property as a major component of international trade.

Drawbacks of the TRIPs Agreement

Innovations are a product of high investments in the research and development sector and the success ratio of this sector being very low leads to demand a higher price when a new product is into place by the developed nations.The TRIPs agreement of WTO is contended to favor developed countries over the underdeveloped and developing countries. The TRIPs agreement favours the developed nations on account of them holding a larger number of patents and copyrights leading to deep dissatisfaction by the least developed nations. The UN Commission on Human Rights in its 52 nd session adopted a resolution, which noted that the TRIPS Agreement constitutes contravention of international human rights law on account of its framework of IPRs which is suited for industrialized countries.

Impact of TRIPs on the Indian IP laws

India being a founder member of both GATT and WTO which automatically made it a signatory of TRIPS agreement and thus was bound to establish a patent law that was in line with the WTO mandate. India has implemented all the TRIPs provisions along with the traditional conventional agreements by enacting new laws or by amending the existing laws.

The Indian Parliament and the Supreme Court of India have always been positive about the IP rights holder's and their views have been seen through the medium of their functions i.e. by way of legislations and through Judgments.

The Following Acts of India cover the Indian IP laws-

- The Copyright Act, 1957 as amended in 1999

- The Trade Marks Act, 1999

- The Geographical Indications of Goods (registration and protection) Act, 1999

- The Designs Act of 2000

- The Patents Act, 1970 as amended in 1999, 2002, 2005

- The Protection of Plant Varieties and Farmer's Rights Act, 20001

- The Biological Diversity Act, 2002

- The Semiconductor integrated circuits layout designs Act, 2000

Some notable amendments after TRIPs

- The Trade Marks Act, 1999 which replaced the Trade and Merchandise Marks Act, 1958 now includes the protection of well-known marks, multi class registration, service marks, increasing of the renewal term of registration, certification marks, infringements, passing-off actions etc. The Act has included provisions for the registration of trademarks for services. This is a result of strict compliance with Article 16 of the TRIPS agreement.

- The Copyright Act, 1957 was amended in 1999 to meet the requirements of the TRIPs agreement wherein Article 10 dealing with Computer Programs and Compilations of Data stated that the source or object code, shall be protected as literary works under the Berne Convention (1971), compilations of data or other material due to selection or arrangement of their contents constitute intellectual creation, was included by way of Section 2(d)(vi) which stated that an author means in relation to any literary, dramatic, musical or artistic work which is computer-generated, the person who causes the work to be created.

Conclusion

International conventions and treaties, national statutes and judicial expositions have evolved the law on intellectual property in all areas. Intellectual property- an intangible right is an important asset and if the TRIPs agreement is utilized in a better way not just to support the holders of rights but also to facilitate overall trade between nations then the entire purpose of enacting TRIPs will be sufficed.

Under TRIPs, the Indian IPR industry has evolved and developed to an extent that companies which were not interested in investing for R&D process are now investing heavily for those inventions. Also from being in a condition where innovators were not aware of what IP rights mean resulting in the death of inventions, high risk of infringement and economic loss we have come far under the TRIPs regime soaring high with the healthy protection provisions in safeguarding & encouraging holders.

CA. Sudha G. Bhushan is a Chartered Accountant and international Transaction Advisor

Roshni Patel is a final year student of SVKM's Pravin GandhiCollege of Law, Mumbai