TRIPS

Also called: Agreement on Trade-Related Aspects of Intellectual Property Rights · Topic: International Trade Policy, WTO and Intellectual Property · NCERT: Beyond NCERT

Meaning

TRIPS (Agreement on Trade-Related Aspects of Intellectual Property Rights) is the WTO agreement that sets the minimum level of protection and enforcement for intellectual property rights (legal rights over inventions, brands, creative works and designs) that every WTO member must provide. It was negotiated in the Uruguay Round and came into force with the WTO in 1995.

It matters because it brought IP into the trade system for the first time. If a country breaks TRIPS, the case can go to the WTO and lead to trade retaliation. It also decides how countries balance two goals: rewarding new medicines and inventions, and keeping them affordable.

Explanation

Why IP rules exist: incentive vs access

• Intellectual property rights (IPRs) have two features:
• Exclusive: only the owner may use the creation, or allow others to use it.

• Time-limited: when the term ends, anyone can use it.

• The core trade-off:

• Incentive: a firm spends crores on research. A temporary monopoly lets it earn that money back.

• Access: while the monopoly lasts, prices stay high. Poor patients or farmers may not be able to buy the product.

• Every IP rule sets this balance. It decides how long the monopoly lasts, what can be patented, and when the state can override it.

• Types covered: patents (inventions), trademarks (brands), copyright (creative works), industrial designs (how a product looks), geographical indications and trade secrets.

How TRIPS works: four core rules

• Minimum standards: every member must give at least this much protection. A country may give more, but not less.
• MFN (most-favoured-nation): an IP benefit given to the nationals of one member must be given to the nationals of all members.
• National treatment: foreigners' IP must be treated no worse than the IP of a country's own citizens.
• Dispute settlement: IP disputes can go to the WTO dispute settlement system.
• So a country that breaks the rules can face trade retaliation.

• Before 1995, WIPO treaties had no such enforcement.

• Transition periods:

• Developing countries (like India) had until 1 January 2005 to bring in product patents for pharmaceuticals and agrochemicals.
• Least developed countries (LDCs): in November 2015 the TRIPS Council extended their pharma transition period to 1 January 2033, or until the country stops being an LDC, if that is earlier [5].
  • Until then, LDCs do not have to protect pharma patents or clinical-trial data [5].

Patents under TRIPS: term and tests

• Patent: a right granted by the government. It lets the holder alone make, use, sell or import an invention for 20 years from the filing date.

• The bargain: the inventor must publish how the invention works. Society learns the technology, and anyone can use it after 20 years.

• Three tests of patentability:

• Novelty: the invention is new.
• Inventive step: it is not obvious to an expert in that field.

• Industrial application: it can be made or used in industry.

• Product patent vs process patent:

• A product patent protects the thing itself, such as a molecule. No one else can make it by any method.

• A process patent protects only one method of making it. Others can make the same product by a different method.

• Worked example: 20 years from filing, not from grant

• A patent is filed on 1 January 2010 and granted in 2014.
• It expires on 31 December 2029.
• So the real monopoly (from grant to expiry) is only about 16 years. The years spent examining the application count against the term.

Flexibilities: how TRIPS protects public health

• Doha Declaration on TRIPS and Public Health (November 2001):
• TRIPS "does not and should not prevent" members from protecting public health. It "can and should" be read that way [1].
• It confirmed that members have the right to grant compulsory licences. A compulsory licence lets the state allow a third party to make a patented product without the owner's consent, in return for a royalty (a fee paid per sale) [2].
• Members are free to decide the grounds for a compulsory licence, and to decide what counts as a national emergency [2].

• It came as a response to the HIV/AIDS crisis, when patented antiretroviral medicines were far too costly for Africa.

• Paragraph 6 system → Article 31bis:

• The problem: a normal compulsory licence must be used mainly for the home market. So a country that cannot make medicines gains little from issuing one.
• The fix: a 2003 waiver allowed generic medicines to be made under a compulsory licence only for export to such countries [1].

• It became permanent as Article 31bis. It came into force on 23 January 2017, once two-thirds of WTO members had accepted it. It was the first amendment to any WTO agreement [1].

• COVID-19 and the MC12 Decision:

• In October 2020, India and South Africa proposed a broad waiver. It would have suspended patents, copyright, industrial designs and trade secrets on COVID-19 vaccines, diagnostics and therapeutics.
• The MC12 Ministerial Decision on the TRIPS Agreement was adopted on 17 June 2022 (WT/MIN(22)/30) [9].
  • It lets eligible members override vaccine patents for five years [3].
  • It also eased the export limits of Art. 31bis [1][3].
• It was narrower than India wanted: it covered vaccines only. Members were to decide on diagnostics and therapeutics within six months [3]. By December 2022 there was no consensus [4].

In India

• Patents Act 1970: it allowed only process patents for food, drugs and chemicals.
• Indian firms could legally reverse-engineer a foreign drug (work out its chemistry and make it by a new process).
• This built India's generics industry. A generic is a copy of a drug, sold under its chemical name, that works the same as the brand.

• India became the "pharmacy of the world". Indian generics make up about 20% of global generic exports by volume [8].

• Amendments to comply with TRIPS:

• 1999: a mailbox (pharma product patent applications were received and stored, to be examined from 2005) and exclusive marketing rights (a temporary right to be the only seller).
• 2002: the 20-year patent term, among other changes.

• 2005: product patents for drugs, food and chemicals, together with public-health safeguards.

• Safeguards that use TRIPS flexibilities:

• Section 3(d), the anti-evergreening rule. Evergreening means making a small change to an old drug to get a fresh patent.
  • Under s. 3(d), new forms of a known substance count as the same substance unless they differ significantly in efficacy [6].
  • Novartis v Union of India (Supreme Court, 1 April 2013): the Glivec (imatinib) patent was refused, and s. 3(d) was upheld.
• Pre-grant opposition (s. 25(1)): any person can challenge a patent application before it is granted.
• Section 84 compulsory licence: available 3 years after grant.
  • Natco v Bayer (March 2012) was India's first compulsory licence, for Nexavar (sorafenib tosylate) [7].
  • The price fell from about ₹2,80,000 to about ₹8,800 a month, a cut of about 96.9%. Bayer received a 6% royalty.
• Section 92: a compulsory licence for a national emergency, extreme urgency or public non-commercial use.
• Section 92A: compulsory licences to export medicines to countries that cannot make them [7]. This is India's way of using the paragraph 6 system.

• International exhaustion (s. 107A(b)): parallel imports are allowed. This means a genuine patented product can be imported from a country where it is sold more cheaply, without the owner's consent.

• External pressure:

• The US Special 301 report put India on its Priority Watch List in 2014, with s. 3(d) among the concerns it named [6].
• India's position is that its law is TRIPS-compliant, and that disputes belong in the WTO.

Don't confuse with

• WIPO treaties: these also set IP rules, but they have no trade-linked enforcement. Under TRIPS, disputes go to the WTO and can lead to trade retaliation.
• TRIPS-plus: these are obligations in FTAs that go beyond TRIPS, such as data exclusivity and patent-term extension. TRIPS itself does not require them. Art. 39.3 only protects test data against "unfair commercial use".
• Doha Declaration (2001) vs MC12 Decision (2022): Doha is a general statement on public health that confirms the right to compulsory licensing [2]. MC12 is a specific five-year waiver for COVID-19 vaccine patents only [3].
• Art. 31bis vs an ordinary compulsory licence: an ordinary compulsory licence must be used mainly for the home market. Art. 31bis allows production for export only, to countries that cannot make medicines [1].

Prelims Hooks

• TRIPS came out of the Uruguay Round and came into force with the WTO in 1995. It sets minimum standards, and members may give more protection.
• The deadline for developing countries to bring in pharma product patents was 1 January 2005. The LDC pharma transition runs to 1 January 2033 (TRIPS Council, November 2015) [5].
• Under TRIPS, a patent lasts 20 years from the filing date, not from the grant date.
• Art. 31bis (compulsory licences for export) came into force on 23 January 2017. It was the first-ever amendment to a WTO agreement [1].
• The MC12 TRIPS Decision (17 June 2022) covered only COVID-19 vaccines, for five years. It did not cover diagnostics or therapeutics [3][9].
• Trap: TRIPS does not require data exclusivity (Art. 39.3 only bars "unfair commercial use"). India follows international exhaustion, so parallel imports are allowed.

Mains Points

• Innovation vs access is a balance, not a choice.
• TRIPS sets the minimum rules, but the Doha Declaration confirms that flexibilities are legitimate [1][2].

• India's 2005 law uses these flexibilities (s. 3(d), compulsory licensing, international exhaustion) and still complies with TRIPS. Novartis (2013) and Natco (2012) show them working in practice.

• Generics as strategic capacity.

• The process-patent era (1970–2005) built India's generics industry, about 20% of global generic exports by volume [8].

• TRIPS-plus demands in the EFTA, UK and EU FTAs, such as data exclusivity and patent-term extension, would threaten this. India must protect its policy space.

• The multilateral fix has limits.

• Art. 31bis took 14 years (from the 2003 waiver to 2017) and has been little used.
• The MC12 decision stopped at vaccines, and talks on extending it stalled [3][4].
• Unilateral tools like Special 301 push for standards stronger than TRIPS [6]. All this shows the North–South split in the WTO. It links to GS-II themes: global health governance and India–US relations.

Related concepts

• Intellectual property rights
• Patent
• Evergreening of patents
• Pre-grant opposition
• Compulsory licensing
• Parallel import
• Data exclusivity
• TRIPS-plus provisions
• Patent pool
• Patent thicket

Read more

• TRIPS and patents: innovation vs access to medicines