Naveen Gupta

Case Analysis Three:

 Intellectual Property Rights and the Transformation of Global Business Activities:

 There has been an intense debate and focus on knowledge management in the last decade. Central to the debate are the new opportunities and challenges faced by corporate organizations in harnessing different sources of knowledge, applying them to exploit business opportunities, or solve business problems. The basis of competition since the early 1990s depends on the capacity of companies to undertake value creating activities through innovation, speed, generating quality goods and services, and achieving customer satisfaction. The success of these activities, developing and sustaining competition, largely depends on the creation and assimilation of various types of knowledge.

 
The TRIPS Agreement (Trade Related Intellectual Property Rights System) of the World Trade Organization:

 The TRIPS agreement under the Uruguay Round and the WTO reflected some of the new areas incorporated into the global trade architecture. For the very first time in trade negotiations, areas relating to the protection of intellectual property, foreign direct investment, agriculture and services will now be governed by GATT/WTO rules.

 The TRIPS Agreement represents the inclusion of intellectual property (IP) in the Uruguay Round (UR) of trade negotiations and agreement.  For the very first time in multilateral trade negotiations, intellectual property benefited from the basic principles of the multilateral trading system and the WTO, including the most-favored nations principle and the dispute settlement mechanism of the WTO. Signatories to the UR Agreement and members of the WTO agreed in principle to establish minimum standards for the protection of IPRS and their enforcement in areas such as new inventions, proprietary commercial information, digital products, software and trade names. Equally significant is the commitment to “strike a balance” between the need to support and promote global research and development (R/D) while ensuring that members of the WTO, particularly the developing economies, have “affordable” access to the results and benefits of global R/D.

 The TRIPS Agreement relating to protection/enforcement of intellectual property (patents, copyright, trademarks, geographical indications) reflects the wider impact of the current scientific and technological revolution on global production and competition. Knowledge has become the main, only sustainable source of competitive advantage. Firms, with their focus on generating value through R/D and innovation, seek to control their knowledge assets. Also important is the increased privatization/commercialization of scientific knowledge, as the private sector becomes the main source for R/D and innovation.

 In addition to the application of GATT/WTO principles to intellectual property, WTO members also agree to provide an adequate level of protection for IP rights. They agree to enforce IP protection without the creation of trade barriers, and the Agreement also reflects the different stages of development and capacity of WTO members to implement their obligations under the TRIPS Agreement.

  
1.  The TRIPS Agreement: Objectives and Main Categories

 Intellectual property rights system (IPRS) under the TRIPS Agreement refers to all categories that are the subject of Section I through VII of Part II of the Agreement. These categories include trademarks, geographical indications, industrial designs, patents, layout-designs of integrated circuits and undisclosed information. Article III of the TRIPS Agreement specifies the obligations of WTO members during the transition period.  Article IV of the Agreement recognizes the most-favored nation principle, non-discrimination, between domestic and foreign individuals and firms.

 Two important industrial sectors, pharmaceutical and agricultural chemical, receive special provision; the “mailbox provision.” Article 70.8 of the Agreement states that: “The country must accept the filing of patent applications from the beginning of the transitional period, even though the decision on whether or not to grant any patent itself need not be taken until the end of this period.” Article 70.9 states that: “If the government allows the relevant pharmaceutical or agricultural chemical product to be marketed during the transition period, it must provide the patent applicant an exclusive marketing right for the product for the five years, or until a decision on granting a product has been made.”

 The Council of TRIPS has the primary responsibility to review all national implementation legislation by members of the WTO. The specific procedures for notifying the TRIPS Council are stated in Article 63.2. Under this Article, members are required to notify the TRIPS Council relative to the “availability, scope, acquisition, enforcement, and prevention of the abuse of intellectual property rights.” The Article further states “that as of the time that a member is obliged to start applying a provision of the TRIPS Agreement, the corresponding law and regulation shall be notified without daily (normally within 30 days) except where otherwise provided by the TRIPS Council.”