1. INTELLECTUAL PROPERTY RIGHTS
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2. • The most rapidly growing method of doing
business abroad is to transfer IPR to a foreign
business in exchange for a fee or other form of
remuneration . IPR are rights to technological
knowhow or artistic work .
• IPR transfers need not involve any capital
investment abroad .
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3. • Owner’s of IPRs transfer them for a variety of
reasons .
• The US firm might , for a fee – sometimes
called a royalty – grant a license to a foreign
company . A license is a limited permission to
use the US firm’s trademarks , copyrights , or
knowhow in making products for sale in the
vicinity of the foreign company’s country .
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4. • Alternatively , the US company might provide
the IPR and physical components to a foreign
manufacturing plant that will fabricate the
product for re export back to the US concern.
• In addition , a US firm can use a transfer of
technology as its contribution to a joint
venture . The joint venture would use the
technology to manufacture and , perhaps ,
market the product .
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5. • If labor is substantially cheaper in a foreign
country , it may entice an IPR owner to shift
production offshore .
• In short there are many reasons for an IPR
owner to transfer its IP. Regardless of the
motivation for the transfer , the risk is the
same – loosing control of one’s IPRs and help
to establish a competitor .
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6. IPR Transfer Arrangements
• Right to Use and Conditions of Use The
licensor often agrees to provide services to
facilitate the anticipated activities such as
assistance in setting up an assembly line or
other training and technical support . The
licensor generally seeks to restrict the
licensee’s use of the transferred IPR . One
common type of restriction is geographical
limitations .
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7. • Field of use limitations restrict the applications
for which the licensee may employ the IPR , for
Eg . The licensor of a laser technology might
permit one licensee to use the technology only in
connection with medical applications , while
retaining for itself the right to use the technology
for communication applications and other uses .
• Other potential restrictions include output or
customer restrictions , especially if the licensor
plans to use the licensee as a source of products
for the licensor’s own distribution requirements
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8. Confidentiality and Improvements
• Another key license provision is the clause
that sets forth the licensee’s obligation to
keep the licensed technology confidential so
that third parties cannot exploit the
technology .
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9. • Thus ,the licensor will try to be sure that the
licensee agrees not to use the IPR in
competition with the licensor or to disclose it
to a potential competitor . The licensee , on
the other hand , will try to keep royalties low
and minimize or abbreviate the duration of
noncompetition or nondisclosure provisions .
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10. International Protection For Patents
Trademarks and Other IP
• Depending upon national policy ,
governments will be more or less protective of
IP . As one might expect , nations that
generate IP favor strong protection and those
that do not create such property do not . This
conflict has been played out in international
treaty negotiations where these nations work
out common interests .
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11. • These treaties streamline and standardize
procedures , expand the geographic scope of
protection and create a much stronger
international IPR enforcement network .
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12. PARIS CONVENTION
• The first international property treaty was the
International convention for the protection
of industrial property , better known as PARIS
CONVENTION . The PARIS CONVENTION ,
originally prepared in 1883 and since revised
many times , guarantees that in each signatory
country , foreign trademark and patent
applications from other signatory countries
will receive the same treatment and priority
as those from domestic applicants .
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13. • The Paris Convention targeted discrimination
against foreigner’s in obtaining patents .
• The Paris Convention also gives a trademark
holder in any signatory country a’’ right of
priority .’’
• There are two main problems with the Paris
Convention scheme . First , the Convention
does not require any minimum substantive
standard of patent protection . Thus , if a
nation has no pharmaceutical R&D capability ,
it can decide that it is “ immoral “ to permit
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14. • The Paris Convention targeted discrimination
against foreigner’s in obtaining patents .
• The Paris Convention also gives a trademark
holder in any signatory country a’’ right of
priority .’’
• There are two main problems with the Paris
Convention scheme . First , the Convention
does not require any minimum substantive
standard of patent protection . Thus , if a
nation has no pharmaceutical R&D capability ,
it can decide that it is “ immoral “ to permit
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15. • Pharmaceutical patents and deny patents
protection to pharmaceuticals . Although as a
practical matter such a law is aimed at
foreigner’s – because no locals have
pharmaceuticals patents – it is in compliance
with the Paris Convention .
• A further drawback of the Convention is its
lack of an enforcement mechanism . Disputes
under the treaty are to be resolved by the
International Court of Justice , but most
signatory countries either do not recognize
the court’s jurisdiction or ignore rulings with
which it does not agree .
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16. • Consequently , there is no real procedure for
enforcing verdicts other than voluntary
compliance . In the 1990’s , the developed
nations determined to resolve these two
defects of the Paris Convention . The result
was the TRIPS Agreement .
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17. PATENTS
• In 1970 , the Patent Cooperation treaty ( PCT )
supplemented the Paris Convention by
establishing a centralized utility patent
application process. The PCT has been signed by
137 states . A PCT application is filed on a
standard form with the (WIPO ) World intellectual
property Organization .
• The (WIPO ), UN agency headquartered in
Geneva , Switzerland processes the common
application and forwards it to the countries
designated by the applicant .
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18. • The (WIPO ), UN agency headquartered in
Geneva , Switzerland processes the common
application and forwards it to the countries
designated by the applicant . If at least one of
the applicants named in the PCT application is
national or resident of PCT signatory , the PCT
gives the application a Priority Claim on that
invention in all signatory states .
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19. • The only region with a consolidated
multinational patent application is the EU .
Since 1978 , one has been able to obtain
protection in all EU countries by filing a single
application under the European Patent
Convention . The convention is now in force in
32 countries . This system was enhanced in
December 1989 when the member states
signed the agreement relating to Community
patents ,
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20. • which created a unitary system for the
application and grant of European patents and
a uniform system for the resolution of
litigation concerning patent infringement .
• The PCT system applies to “utility “ patents .
There is a similar treaty system for design
patents . The Hague System for the
International Registration of industrial Designs
(better known as Geneva Act ),which
• establishes a single standard application and
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21. • single design patent filing process . The
Geneva Act entered into force in December of
2003 . The US is one of 29 countries to sign
this act , but has not yet ratified it . To date ,
the Act has been ratified or acceded to by 22
countries .
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22. Trademarks
• Registered trademarks are assured national
treatment by the Paris Convention . The Paris
Convention also confers a “ right of priority
“to a trademark holder if the foreign
registrations are made within 6 months after
the original registration . Trademark
prosecution , however , is usually based on
the law of the country where registration is
sought .
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23. • One exception to this nation – by – nation
process is EU ‘s single multinational trademark
registration system . Since 1996 , the
Community Trademark Regulation ,
administered by the Office for Harmonization
in the internal market (OHIM ) , has allowed a
single trademark registration enforceable
throughout the EU . The Trademark Regulation
also provides a unified enforcement authority
, the Office for Harmonization in the internal
market (OHIM ) infringement in any member
state can be persecuted through this office .
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24. • The other exception is the new system
established in the 1989 protocol to the Madrid
Agreement Concerning the International
Registration of Marks of 1891 (Madrid
Protocol ) . Like the PCT , Madrid Protocol
provides a centralized filing system on a
standard form and a designation of the
countries in which trademark registration is
sought .
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25. • The WIPO also administers the prosecution
and notifies designated countries Although 73
,countries have ratified the Protocol , the
United States and many other important
nations have not.
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26. Domain Names
• It is not clear how trademark law protects
Internet domain names . After much
international negotiation in August 1999 ,
Internet Corporation for Assigned Names and
Numbers ( ICANN ) adopted the uniform
Domain Name Dispute resolution policy
(UDRP) . The UDRP set forth general “ first to
file “ rules for domain names , but expected
bad faith filings .
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27. • Over time the desire to stop “ cyber
squatting” led to an expansion of bad faith
means in the UDRP context . At common law ,
bad faith meant intentional wrongful behavior
, but in the UDRP , it now includes some
negligence without a finding of intent . For eg.
A negligent failure to conduct prior checks for
third party rights has been held to constitute
bad faith .
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28. • The UDRP also created an innovative dispute
resolution process that submits complaints
and replies electronically over the Internet to
a WIPO Arbitration and Mediation Center .
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29. Copyrights
• The Berne Convention for the Protection of
literary and Artistic Works , better known as
the Berne Convention , deals with the granting
of copyrights among signatory nations . Like
the Paris Convention , Berne Convention is
based on a national treatment all 163
signatory nations to enact certain minimum
substantive laws .
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30. • These include prohibitions against copying
literary and artistic works and granting
authors exclusive rights to adaptation and
broadcasts of works . In contrast to the
fragmented patent and trademark system ,
there is no filing requirement . All an author
needs to do is affix the symbol C and the year
of authorship to provide copyright protection
throughout the world .
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31. • The Berne Convention signatories agree to
grant national treatment to copyright holders
from other signatories automatically from the
moment of creation rather than the time of
filing .
• The computer revolution and the growth of
the internet have brought software copyright
issues to the forefront . First , there was a
significant dispute as to whether computer
programs were copyrightable subject matter .
This was resolved in late December 1996 ,
when WIPO approved the Draft Treaty on
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32. • Certain Questions concerning the Protection
of Literary and Artistic Works , providing that “
computer programs are protected as literary
works within the meaning of Article 2 of the
Berne Convention . Such protection applies to
the expression of a computer program in any
form .“ this treaty also known as the WIPO
Copyright Treaty or the Protocol to the Berne
Convention , entered into force in 2002 , and
64 countries are signatories . It expands the
scope of broadcasts that an author must
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33. • Permit to include “ any communication to the
public of their , by wire or wireless means ,
including the making available to the public of
their works in such a way that members of the
public may access these works from a place
and a time individually chosen by them .“
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34. • Like the Paris Convention , it has been very
difficult to enforce the Berne Convention
effectively . This enforcement problem was
one of the principal forces that drove
negotiations on the TRIPS Agreement .
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35. TRIPS
• As IP became increasingly valuable , the
developed world – which created virtually all
such property - increased pressure to cure the
defects of the Paris and Berne Convention
systems . These efforts bore fruit in the GATT
Agreement on Trade Related Aspects of IPR ,
which became effective in most nations on
January 1, 2000 . TRIPS requires its signatories
to enact minimum substantive standards of
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36. • Protection and create a viable enforcement
mechanism . In effect , TRIPS has caused
developing countries to adopt IP laws that
approximate those of Europe and North
America and has created a system to enforce
them .
• TRIPS requires every member of the WTO to
abide by the Paris and Berne Conventions –
including the recent protocols to those
treaties – and apply the treaties National
treatment requirements so that all foreign
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37. • IPR owners receive the protection as local
nationals . It establishes 50 year copyright
protection pursuant to the Berne Convention .
All WTO members must recognize the patent
holders right to assign or license their patents
and the term of patent protection must be at
least 20 years .
• Further , patent protection is now to be
available for any new inventions , whether
products or processes , in all fields of
technology , provided that they are new ,
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38. • Involve an inventive step and are capable of
industrial application . TRIPS even established
minimum standards for trade secret
protection after the model of uniform trade
secret statutes in the US .
• TRIPS seeks to remedy some of the
acknowledged problems of the Paris and
Berne Conventions . First , unlike the Paris
Convention , TRIPS sets minimum standards of
IP protection . A nation can no longer comply
with IP law if its law provide no effective
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39. • Protection . Second , TRIPS requires signatory
countries to ensure that enforcement
procedures as specified in the part , under the
laws so as to permit effective action against
any act of
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40. • The TRIPS Agreement, which came into effect
on 1 January 1995, is to date the most
comprehensive multilateral agreement on
intellectual property.
• The areas of intellectual property that it
covers are: copyright and related rights (i.e.
the rights of performers, producers of sound
recordings and broadcasting organizations);
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41. • Trademarks including service marks;
geographical indications including appellations
of origin; industrial designs; patents including
the protection of new varieties of plants; the
layout-designs of integrated circuits; and
undisclosed information including trade
secrets and test data.
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42. • The three main features of the Agreement
are:
• Standards.
• Enforcement
• Dispute settlement
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43. Standards
• In respect of each of the main areas of
intellectual property covered by the TRIPS
Agreement, the Agreement sets out the
minimum standards of protection to be
provided by each Member. Each of the main
elements of protection is defined, namely the
subject-matter to be protected, the rights to
be conferred and permissible exceptions to
those rights, and the minimum duration of
protection.
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44. • The Agreement sets these standards by
requiring, first, that the substantive
obligations of the main conventions of the
WIPO, the Paris Convention for the Protection
of Industrial Property (Paris Convention) and
the Berne Convention for the Protection of
Literary and Artistic Works (Berne Convention)
in their most recent versions, must be
complied with
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45. • With the exception of the provisions of the
Berne Convention on moral rights, all the
main substantive provisions of these
conventions are incorporated by reference
and thus become obligations under the TRIPS
Agreement between TRIPS Member countries.
The relevant provisions are to be found in
Articles 2.1 and 9.1 of the TRIPS Agreement,
which relate, respectively, to the Paris
Convention and to the Berne Convention.
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46. • Secondly, the TRIPS Agreement adds a
substantial number of additional obligations
on matters where the pre-existing conventions
are silent or were seen as being inadequate.
The TRIPS Agreement is thus sometimes
referred to as a Berne and Paris-plus
agreement.
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47. Enforcement
• The second main set of provisions deals with
domestic procedures and remedies for the
enforcement of intellectual property rights.
The Agreement lays down certain general
principles applicable to all IPR enforcement
procedures. In addition, it contains provisions
on civil and administrative procedures and
remedies, provisional measures, special
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48. • requirements related to border measures and
criminal procedures, which specify, in a
certain amount of detail, the procedures and
remedies that must be available so that right
holders can effectively enforce their rights.
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49. Dispute settlement
• . The Agreement makes disputes between WTO
Members about the respect of the TRIPS
obligations subject to the WTO's dispute
settlement procedures.
• In addition the Agreement provides for certain
basic principles, such as national and most-
favoured-nation treatment, and some general
rules to ensure that procedural difficulties in
acquiring or maintaining IPRs do not nullify the
substantive benefits that should flow from the
Agreement.
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50. • The obligations under the Agreement will
apply equally to all Member countries, but
developing countries will have a longer period
to phase them in. Special transition
arrangements operate in the situation where a
developing country does not presently provide
product patent protection in the area of
pharmaceuticals.
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51. • The TRIPS Agreement is a minimum standards
agreement, which allows Members to provide
more extensive protection of intellectual
property if they so wish. Members are left free
to determine the appropriate method of
implementing the provisions of the
Agreement within their own legal system and
practice.
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52. Certain general provisions
• As in the main pre-existing intellectual
property conventions, the basic obligation on
each Member country is to accord the
treatment in regard to the protection of
intellectual property provided for under the
Agreement to the persons of other Members.
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53. • The criteria for determining which persons
must thus benefit from the treatment
provided for under the Agreement are those
laid down for this purpose in the main pre-
existing intellectual property conventions of
WIPO, applied of course with respect to all
WTO Members whether or not they are party
to those conventions.
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54. • These conventions are the Paris Convention,
the Berne Convention, International
Convention for the Protection of Performers,
Producers of Phonograms and Broadcasting
Organizations (Rome Convention), and the
Treaty on Intellectual Property in Respect of
Integrated Circuits (IPIC Treaty).
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55. • Articles 3, 4 and 5 include the fundamental
rules on national and most-favoured-nation
treatment of foreign nationals, which are
common to all categories of intellectual
property covered by the Agreement
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56. Substantive standards of protection
Copyright
• Article 9.2 confirms that copyright protection
shall extend to expressions and not to ideas,
procedures, methods of operation or
mathematical concepts as such.
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57. • Article 10.1 provides that computer programs,
whether in source or object code, shall be
protected as literary works under the Berne
Convention (1971). This provision confirms
that computer programs must be protected
under copyright and that those provisions of
the Berne Convention that apply to literary
works shall be applied also to them
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58. • It confirms further, that the form in which a
program is, whether in source or object code,
does not affect the protection. The obligation
to protect computer programs as literary
works means e.g. that only those limitations
that are applicable to literary works may be
applied to computer programs. It also
confirms that the general term of protection
of 50 years applies to computer programs.
Possible shorter terms applicable to
photographic works and works of applied art
may not be applied.
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59. • Article 11 provides that authors shall have in
respect of at least computer programs and, in
certain circumstances, of cinematographic
works the right to authorize or to prohibit the
commercial rental to the public of originals or
copies of their copyright works. With respect
to cinematographic works, the exclusive rental
right is subject to the so-called impairment
test:
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60. • A Member is excepted from the obligation
unless such rental has led to widespread
copying of such works which is materially
impairing the exclusive right of reproduction
conferred in that Member on authors and
their successors in title. In respect of
computer programs, the obligation does not
apply to rentals where the program itself is
not the essential object of the rental.
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61. Related rights
• The provisions on protection of performers,
producers of phonograms and broadcasting
organizations are included in Article 14.
According to Article 14.1, performers shall
have the possibility of preventing the
unauthorized fixation of their performance on
a phonogram (e.g. the recording of a live
musical performance).
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62. • The fixation right covers only aural, not
audiovisual fixations. Performers must also be
in position to prevent the reproduction of
such fixations. They shall also have the
possibility of preventing the unauthorized
broadcasting by wireless means and the
communication to the public of their live
performance.
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63. • Broadcasting organizations shall have, in
accordance with Article 14.3, the right to
prohibit the unauthorized fixation, the
reproduction of fixations, and the
rebroadcasting by wireless means of
broadcasts, as well as the communication to
the public of their television broadcasts.
However, it is not necessary to grant such
rights to broadcasting organizations, if owners
of copyright in the subject-matter of
broadcasts are provided with the possibility of
preventing these acts, subject to the
provisions of the Berne Convention.
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64. Trademarks
• The basic rule contained in Article 15 is that any
sign, or any combination of signs, capable of
distinguishing the goods and services of one
undertaking from those of other undertakings,
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 colours as well as any
combination of such signs, must be eligible for
registration as trademarks.
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65. • Initial registration, and each renewal of
registration, of a trademark shall be for a term
of no less than seven years. The registration of
a trademark shall be renewable indefinitely
(Article 18).
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66. • It is further required that use of the trademark
in the course of trade shall not be unjustifiably
encumbered by special requirements, such as
use with another trademark, use in a special
form, or use in a manner detrimental to its
capability to distinguish the goods or services
(Article 20).
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67. Geographical indications
• Geographical indications are defined, for the
purposes of the Agreement, as 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 (Article 22.1).
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68. • Thus, this definition specifies that the quality,
reputation or other characteristics of a good
can each be a sufficient basis for eligibility as a
geographical indication, where they are
essentially attributable to the geographical
origin of the good.
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69. • In respect of all geographical indications,
interested parties must have legal means to
prevent use of indications which mislead the
public as to the geographical origin of the
good, and use which constitutes an act of
unfair competition within the meaning of
Article 10bis of the Paris Convention (Article
22.2).
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70. Industrial designs
• Article 25.1 of the TRIPS Agreement obliges
Members to provide for the protection of
independently created industrial designs that
are new or original. Members may provide
that designs are not new or original if they do
not significantly differ from known designs or
combinations of known design features.
Members may provide that such protection
shall not extend to designs dictated essentially
by technical or functional considerations.
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71. Patents
• The TRIPS Agreement requires Member countries
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 (Article 27.1).
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72. • The exclusive rights that must be conferred by
a product patent are the ones of making,
using, offering for sale, selling, and importing
for these purposes. 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 (Article 28).
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73. Layout-designs of integrated circuits
• Article 35 of the TRIPS 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. These provisions deal with, inter alia, the
definitions of “integrated circuit” and “layout-
design (topography)”, requirements for
protection, exclusive rights, and limitations, as
well as exploitation, registration and disclosure.
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74. • An “integrated circuit” means a product, in its
final form or an intermediate form, in which
the elements, at least one of which is an
active element, and some or all of the
interconnections are integrally formed in
and/or on a piece of material and which is
intended to perform an electronic function.
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75. • A “layout-design (topography)” is defined as
the three-dimensional disposition, however
expressed, of the elements, at least one of
which is an active element, and of some or all
of the interconnections of an integrated
circuit, or such a three-dimensional
disposition prepared for an integrated circuit
intended for manufacture.
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76. • The obligation to protect layout-designs
applies to such layout-designs that are original
in the sense that they are the result of their
creators' own intellectual effort and are not
commonplace among creators of layout-
designs and manufacturers of integrated
circuits at the time of their creation. The
exclusive rights include the right of
reproduction and the right of importation,
sale and other distribution for commercial
purposes. Certain limitations to these rights
are provided for.
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77. Protection of undisclosed
information
• The TRIPS Agreement requires undisclosed
information -- trade secrets or know-how -- to
benefit from protection. According to Article
39.2, the protection must apply to information
that is secret, that has commercial value
because it is secret and that has been subject
to reasonable steps to keep it secret.
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78. • The Agreement does not require undisclosed
information to be treated as a form of
property, but it does require that a person
lawfully in control of such information must
have the possibility of preventing it from being
disclosed to, acquired by, or used by others
without his or her consent in a manner
contrary to honest commercial practices.
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79. • “Manner contrary to honest commercial
practices” includes breach of contract, breach
of confidence and inducement to breach, as
well as the acquisition of undisclosed
information by third parties who knew, or
were grossly negligent in failing to know, that
such practices were involved in the
acquisition.
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80. Control of anti-competitive practices
in contractual licences
• Article 40 of the TRIPS Agreement recognizes
that some licensing practices or conditions
pertaining to intellectual property rights which
restrain competition may have adverse effects
on trade and may impede the transfer and
dissemination of technology (paragraph 1).
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81. • Member countries may adopt, consistently
with the other provisions of the Agreement,
appropriate measures to prevent or control
practices in the licensing of intellectual
property rights which are abusive and anti-
competitive (paragraph 2).
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82. • The Agreement provides for a mechanism
whereby a country seeking to take action against
such practices involving the companies of
another Member country can enter into
consultations with that other Member and
exchange publicly available non-confidential
information of relevance to the matter in
question and of other information available to
that Member, subject to domestic law and to the
conclusion of mutually satisfactory agreements
concerning the safeguarding of its confidentiality
by the requesting Member (paragraph 3).
Similarly, a country whose companies are subject
to such action in another Member can enter into
consultations with that Member (paragraph 4).
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83. • Similarly, a country whose companies are
subject to such action in another Member can
enter into consultations with that Member
(paragraph 4).
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