SYMBIOSIS LAW SCHOOL, PUNE

1ST INTERNAL ASSESMENT

TRADE IN INTELLECTUAL PROPERTY

WRITTEN SUBMISSION

JALAJ AGARWAL

16010125205

DIVISION C

IV YEAR BA LLB
 International Regime of Intellectual Property Laws and its Importance in
Trade

INTRODUCTION

Intellectual property (IP) is a term referring to a brand, invention, design or other kind of
creation, which a person or business has legal rights over. According to the World Intellectual
Property Organization (WIPO), IP refers to creations of the mind: inventions, literary and artistic
works, and symbols, names, images, and designs used in commerce. 1 IPR generally provide time
limited monopolies to right holders to use, commercialize, and market their creations and to
prevent others from doing the same without their permission. Almost all businesses own some
form of IP, which is regarded as an important business asset. Common types of IP include:
Copyright – this protects written or published works such as books, songs, films, web content
and artistic works; Patents – this protects commercial inventions, such as, a new business product
or process; Designs – this protects designs, such as drawings or computer models; Trademarks –
this protects signs, symbols, logos, words or sounds that distinguish your products and services
from those of your competitors.
Many of the rapid and unparalleled changes in intellectual property law and policy over the last
three decades are due to their intersection with international trade and the numerous international
trade agreements negotiated and brought into force during this period. This increased activity
with respect to international trade agreements is partly the result of the rapid increase in cross-
border exchanges of goods, services, capital and knowledge that has taken place since World
War II. The protection of Intellectual Property Rights is an important tool to regulate and
facilitate trade, information and knowledge in innovative and creative goods and services. The
Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) at the World Trade
Organization (WTO) obliges member countries to protect patents, copyrights, trademarks, and
trade secrets. Since the IPR provisions in the TRIPS Agreement, IPR protection and enforcement
have come to the forefront as one of the key issues in international trade. As knowledge-based or

1
World Intellectual Property Organization, 2019. What is Intellectual Property? [online]Available at:
<http://www.wipo.int/about-ip/en/>
high-tech products are taking a bigger share in the total world trade, it is important to identify the
relationship between IPR and international trade.

International Regime of Intellectual Property Laws

Intellectual Property rights are territorial by legal tradition, with each country establishing the
terms under which it will define and protect such property. But today, trade and commerce in any
commodity takes place on a global platform and as such Intellectual property is no exception to
this. The international usage of intellectual property is crucial for trade, foreign direct investment
(FDI) and technology licensing across borders. The friction between the increasing need for
international exploitation of intellectual properties and the territorial nature of rights to do so has
resulted in a lot of extensive regional, bilateral and multilateral negotiations on IP rights, which
has resulted in a significant expansion of required minimum standards, especially in developing
economies. The most outstanding achievement in this regard is the conclusion of the Agreement
on Trade-Related Intellectual Property Rights (TRIPS), a foundation of the new WTO.2

The rules governing all this cross-border trade and the regulatory framework that governments
provide are both domestic and international, the latter having been negotiated, modified and
updated since World War II in various global, regional and bilateral international trade. 3 From an
international trade perspective, the centerpiece of the global institutional regime is the Geneva-
based WTO, which evolved from the General Agreement on Tariffs and Trade (GATT) in
1995.The legal regime that governs intellectual property and the protection of this intellectual
property. This regime is what acts the base for any trade, be it international or national, of
intellectual property.
Important Legislations and organizations which form this international regime are:
 The Paris Convention on the Protection of Industrial Property-
The Paris convention was executed in 1883, this constitutes the first international property treaty
guaranteeing 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.

2
Keith E. Maskus, The International Regulation of Intellectual Property, University of Colorado, 1997
3
Davis, J., Intellectual Property Law, Wiltshire: Cromwell Press., 2001
  The Berne Convention for the Protection of Literary and Artistic Works-
In 1886 after the Paris Convention, the Berne convention was established to provide protection
to copyright, under this, each member state recognizes the copyright of authors from other
member states in the same way as the copyright of its own nationals.
 Madrid Agreement Concerning the International Registration of Marks-
Having dealt with some form of international protection for patents as well as copyright, there
was felt a need for the protection of trademarks at the global level as well. Accordingly, the
Madrid Agreement dealing with trademarks was concluded in 1891. Under this, a person can file
a single trade mark application at their national office that will provide protection in multiple
countries.
These three agreements even today can be said to cover the major principles of protection of the
principal categories of intellectual property.
 The Bureaux Internationaux Réunis pour la Protection de la Propriété Intellectuelle
(BIRPI)-
This was a larger umbrella organization, which encompassed within itself the three Conventions
as mentioned above. Eventually In the year 1893; in the post-World War II era this evolved into
World Intellectual Property Organization (WIPO), based in Geneva.4
 World Intellectual Property Organization (WIPO)-
WIPO is the modern day international body dealing with the regulation of intellectual property.
It became a formal part of the United Nations system in 1974. The major focus and aim of WIPO
can be encapsulated into the following-5
a) The establishment and development of the best intellectual property standards- The aim of
WIPO is to get its member nations to agree upon norms that are of as high a standard as possible,
which must also ideally be consistent and coherent.
b) The development of a balanced and effective international intellectual property (IP) system
that enables innovation and creativity for the benefit of all.
When we talk about the trade related aspect of WIPO, it has to be noted that, unfortunately,
international trade concerns and issues have never been the focus of WIPO, it has taken a back
seat due to other agendas.
4
Dr. Eugene M. Braderman, The World Intellectual Property Organization and the Administrative Reorganization
of BIRPI, J. Res. & Ed. 673 1990
5
May, C., The World Intellectual Property Organization: Resurgence and the Development Agenda, (2007)
  TRIPS Agreement-
The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is an
international legal agreement between all the member nations of the World Trade Organization.
When it comes to trade and intellectual property, this is the most relevant and comprehensive
Agreement. It came into effect on 1st January 1995.
TRIPS was a result of concerted efforts on the part of certain governments and private sector
organisations to establish adequate and effective levels of protection for intellectual property
rights, and to reduce distortions and impediments to international trade arising from differing
standards of protection.6 TRIPS upholds a variety of intellectual property rights, including
copyright, trademarks, geographical indications, industrial designs, patents, and trade secrets.
Protection for plant varieties is also mandated, whether by patents or otherwise. In addition to
substantive provisions regarding the rights themselves, TRIPS also specifies enforcement
measures, dispute settlement mechanisms, and transitional arrangements for WTO member
countries lacking a developed intellectual property regime.
 The Patent Cooperation Treaty –
This is a central system for obtaining a ‘bundle’ of national patent applications in different
jurisdictions through a single application. Concluded in 1970, it provides a unified procedure for
filing patent applications to protect inventions in each of its contracting states. A patent
application filed under the PCT is called an international application, or PCT application.7

International Trade and Intellectual Property

International trade refers to the exchange of goods and services across borders. The increasing
exchange of goods across the world has led to the emergence of a virtual global market which
comprises of almost all countries, and survives on a robust trade system and friendly trade
relations between nations. For obvious reasons, businesses are eager to tap into this market,
which has led to it becoming extremely competitive. Access to new markets has become easier
now than it ever was. In order for businesses to survive in this cutthroat environment, an
extremely strong domestic and international regime for the protection of all kinds of intellectual
property becomes essential. The last decades have been characterized by an increasing
6
Matthews, D., Globalizing Intellectual Property Rights: The TRIPs Agreement. Routledge, (2002)
7
https://www.wipo.int/pct/en/
interaction among countries, especially through trade and foreign direct investment. In particular,
since the 1990s there has been a process of reduction of trade barriers, reinforced through the
signing of bilateral, regional, and multilateral trade agreements. These years have been also
characterized by the proliferation of different types of Trade Agreements (TAs) and investment
agreements, which are shaping international relations.
The process of globalization has also led to changes in international institutional and normative
aspects. The establishment of the World Trade Organization (WTO) in 1994 to regulate
international trade and to establish a framework for trade policies came along with several
agreements demanding institutional reforms including those related with intellectual property
rights (IPRs). The agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS)
is certainly one of the most renowned. With the signing of the TRIPS agreement, countries
commit to adopt or modify their intellectual property related legislation in accordance to the
minimum standards demanded by the agreement. Since then, there has been a process of global
strengthening and harmonization of IPRs systems.8
IP Issue Areas to be considered in International Trade:

 Rights are Territorial

It is important to keep in mind that IP rights are only valid in the country or region in which they
have been granted. Therefore, applying for such rights in other countries is important if there is
an intention to go international. However, note copyright is automatically available through the
provisions of the Berne Convention, famous marks have automatic protection, and trade secrets
are by their nature confidential.
IP can be registered through different routes:
National Route – In this case Party need to apply in each country; pay fees, translation into
national languages
International route - WIPO Administers the Madrid, Hague and PCT Systems for the
international registration of marks, designs and patents.9 In case of Madrid and Hague,
international application is valid in the designated countries unless rejected within a specified
time while in case of PCT international application is subject to international phase

8
Maskus, K. and M. Penubarti, How Trade-Related are Intellectual Property Rights?, Journal of International
Economics, (1995)
9
https://www.wipo.int/about-wipo/en/activities_by_unit/
(international search and patentability report and a preliminary examination report, if required)
followed by the national phase. Here the designated countries decide on patentability.

 Secure Freedom to Operate

Analyzing Freedom to Operate (FTO) is necessary to evaluate whether you are in any way
infringing the patents, designs or trademarks of others. Such an evaluation is usually done by
conducting search in patent, trademark and design databases for patent applications, granted
patents, registered trademarks or designs. As patents, trademarks and designs are granted to
particular territories an FTO search may reveal that the particular IP in question is not protected
in the territory of interest.
If the search produces a prior existing patent, trademark or design in the market of interest then
clearly it cannot be used as it is. Options available are to change the trademark, design around
the patent or design, offer to buy or license that right or challenge its validity

 Priority Period
In patent, industrial design rights and trademark laws, a priority period or priority right is a time-
limited right, triggered by the first filing of an application for a patent, an industrial design or a
trademark respectively. The priority right allows the claimant to file a subsequent application in
another country for the same invention, design, or trademark effective as of the date of filing the
first application. When filing the subsequent application, the applicant must claim the priority of
the first application in order to make use of the right of priority. The right of priority belongs to
the applicant or his successor in title.10
Once an application for a patent or design right has been made domestically (priority date) an
international application has to be made within the priority period. Therefore, the international
application will benefit from the priority date.

 Working with Partners

Dealing with IP in other countries can often lead to some collaboration or partnership with some
third party in that country. Ownership of IP, creation of new IP or the Assignments/licenses for
use of such IP can create risk of unauthorized use or disclosure of trade secrets by partner. There
can always be a risk that the partner will use trade secrets of others and expose you to litigation.
Thus there should be a policy for indemnification and ensuring that quality of product is
10
https://www.ige.ch/en/protecting-your-ip/patents/before-you-apply/priority-period.html
maintained so as to sustain brand image. Additionally, Intellectual Properties if registered in the
partners name in the country could create problems once the relationship ends.

Importance of Intellectual Property in Trade

Intellectual property protection is crucial in fostering international trade. Businesses of all

nations now operate in an increasingly competitive worldwide marketplace. Strong domestic and
international protection of Intellectual Property is vital to the success of any business in that
marketplace. In the past also, the greatest competitive advantages for any organization were the
ideas that led to the industrial and technological progress. In today’s globalized economy, it is
important to encourage and protect those ideas to promote international trade. International trade
is a major factor in the health and stability of the major economies of the world.

Considering intellectual property while trading internationally has many benefits. It ensures that
you maintain exclusivity for your products and provides an opportunity to stop infringers. It also
helps in avoiding infringement upon other's Intellectual Property rights.

Patents provide an incentive for innovation as managing and providing innovation better than its
competitors is one of the main objectives of a business that wishes to survive and thrive in
today’s economy, patents provide technological and market information, patent statistics reveal
trends in trade competition.11 A country’s patent system further helps in protecting domestic
markets against foreign competitors who copy the country’s products, while foreign patent
protection helps the country’s firms in entering foreign markets.

Intellectual property provides a vital source of international license fee income, trademarks
provide product recognition in the international marketplace, and effective patent protection in
developing countries is critically important to their economic growth. 12 Hence, IP rules
encourage innovation, product development, and technical change.

11
Christopher M. Kalanje, Role of Intellectual Property in Innovation and New Product Development, 2005

Gerald J. Mossinghoff, the Importance of Intellectual Property Protection in International Trade, 7 B.C. Int'l &
12

Comp. L. Rev. 235 (1984)

Developing countries hope to attract greater inflows of technology by strengthening their IP rules
systems either unilaterally or through adherence to TRIPS. Technology is transferred across
borders through three interdependent channels - international trade in goods, foreign direct
investment within multinational enterprises, and contractual licensing of technologies and
trademarks to unaffiliated firms, subsidiaries, and joint ventures. Research has shown that
stronger IP rights could have potentially significant and positive impacts on the transfer of
technology to developing countries through these channels.13
The IP rules systems of developing countries favour information dissemination through low-cost
imitation of foreign products and technologies as domestic invention and innovation is
insufficiently developed and does not require protection. However, these IP systems stifle
technical change even at low levels of economic development.

Further IP enables businesses to use it to: Create differentiation and add value, Command higher
prices and sustained demand through brand loyalty, provide new and/or improved features,
captivating designs which attract partners and investors. Helps in gaining access to new markets
and generate new sources of revenue through licensing, forming partnerships and persuading
investors.14
IP rules also encourage the development of interregional and international distribution and
marketing networks that are critical for achieving economies of scale.

Conclusion & Suggestions

The purpose of IP rules are promotion of investments in knowledge, creation and business
innovation by the award of exclusive rights to use and sell newly developed technologies, goods,
and services, and the promotion of widespread dissemination of new knowledge by requiring
right holders to place their inventions and ideas on the market. Thus a balance must be struck
between these two purposes. An overly protective IP system will limit the social gains from
invention by reducing incentives to disseminate its fruits while an overly weak system could
reduce innovation by failing to provide an adequate return on investment.7

13
Rapp, R. and R. Rozek, Benefits and Costs of Intellectual Property Protection in Developing Countries, Journal of
World Trade, (1990)
14
Park, W. and J. Ginarte, “Intellectual Property Rights and Economic Growth.” Contemporary Economic Polic,
(1997)
As mentioned above, their benefits are material; however, it is important to remember that IP
protection is usually limited to certain time and space, and also, that there is always a risk
derived from the disclosure of information required during the application process, which in
most countries is public.
After looking at the various aspects of trade and intellectual property, it is made clear that there
are still a few lacunae when it comes to trade and Intellectual Property. There are many ways in
which the international regime could be altered to ensure better cohesion between intellectual
property and international trade.
Some important things that can be done to improve the situation are as follows:
 Stable Environment
World economies are becoming reliant more and more on people’s knowledge, information,
genius and talent, therefore, the key to foreign and local investment for the creation of ideas,
research and development of technology is to generate a suitable and stable environment for
trade and this could only be achieved through effective and reliable legal systems to protect IP
rights and the formation of new and modern mechanisms which fluently work with current
business transactions. This should also cover related court proceedings which need to be more
effective and less expensive. Thus the challenge for international organizations and governments
is to establish an appropriate environment for promoting competitiveness and interesting trade
opportunities which lead to employment, specialized training, conscious and rational exploitation
of natural resources, and a rapid increase in the commercial and economic growth.
 Rigid enforcement system:
There is a requirement of a stronger and comprehensive enforcement system for protection of IP
in the globalized market. Unfortunately, the regime that has been established by TRIPS is not
sufficient to face the modern day challenges facing trade and intellectual property.  One of the
major drawbacks of the TRIPS Agreement is that it does not lay a strong international
enforcement procedure.  Members are left free to determine the appropriate method of
implementing the provisions of the Agreement within their local system and practice. The TRIPS
therefore becomes a kind of toothless mechanism, which does put any strong obligations upon its
members. A combination of these factors has ensured that where trade is involved, the
enforcement of intellectual property rights standards and norms has taken place mainly at the
national level through national laws put in place by various countries, and not at the international
level. Therefore the need of the hour is the development of a proper international mechanism for
the enforcement of the rights and obligations of the parties.
 TRIPS Agreement
Article 45 of TRIPS shows lack of international consistency because of its discretionary nature.
Serious modifications are required where a plaintiff’s claim concerns multiple countries but only
one recognizes account of profits consistent with Article 45 of TRIPS.15 These conflicts of law
problems could be avoided if all countries recognized restitution related remedies. The need to
remove international inconsistencies is becoming more important in a bid to promote free trade
and certainty. Business practice in the world today relies heavily on reciprocity within the global
market. Hence, domestic laws should be counter-balance with this long-term strategy in mind.
 Global Consensus on the importance of trade and international trade:
In today’s global economy, intellectual property rights are more important than ever. Although
the TRIPS Agreement is a starting point, there needs to be more consensus and open debate
which would lead to a better understanding of what the problems are as well as may lead to
effective and workable solutions.

THE TRIPS
AGREEMENT AND
DEVELOPING
COUNTRIES
Carlos M. Correa
15
Carlos Correa, The TRIPS agreement and developing countries, DOI: 10.1007/0-387-22688-5_54, January 2005
THE TRIPS
AGREEMENT AND
DEVELOPING
COUNTRIES
Carlos M. Correa
 Developing countries
Another factor relating to the adoption of stricter IP rights standards in developing countries is
the potential for IP rights to support monopoly pricing. These concerns could be valid; however,
if IP rules were introduced into competitive markets, such impacts should be limited.
Another major concern is that the costs of administration and enforcement of the stricter IP rules
could be burdensome for developing countries. However, there three ways of countering this
problem; 1) intellectual property offices may charge fees for registration procedures to defray
their costs, 2) poor countries may petition for financial assistance from industrial countries,
WIPO and WTO to help absorb the fixed costs, 3) developing country authorities may avail
themselves of cooperative international agreements to help cut their costs.
 Natural resources
Developing countries host the majority of natural resources but often lack the technological
capacity and budget to develop these resources sustainably. However, this does not mean that
developing countries should avoid IP protection, but to ensure that this protection genuinely
safeguards their interests. Although evidence about implementation and protection of natural
resources is scarce, this could be facilitated by following the provisions in TRIPS to ensure a
sustainable growth.
Therefore, with the help of a few improvements, the law dealing with intellectual property and
International trade could lead to a better protection of the rights of the inventors.
 Bibliography

BOOKS
 V.K. Ahuja, Law relating to Intellectual Property Rights, 3rd Edn. 2017

 B L Wadehra Law Relating to Intellectual Property, 5th Edn. 2011 (Reprint)

ARTICLES
 Jerome H. Reichman, Intellectual Property in International Trade: Opportunities and
Risks of a GATT Connection, Vanderbilt Journal of Transnational Law 747-891 (1989),
Available at: https://scholarship.law.duke.edu/faculty_scholarship/453
  Gerald J. Mossinghoff, The Importance of Intellectual Property Protection in
International Trade, 7 B.C. Int'l & Comp. L. Rev. 235 (1984), Available at :
http://lawdigitalcommons.bc.edu/iclr/vol7/iss2/2

 John M. Curtis, Intellectual Property Rights and International Trade: An Overview CIGI
Papers no. 3, May 2012

 Ian F. Fergusson, Intellectual Property Rights (IPR) and International Trade,

Congressional Research Service 7-5700, 2011, Available at: https://www.crs.gov.

 Edmund T. Pratt, Jr., Intellectual Property Rights and International Trade. 1999
 Campi, Mercedes and Dueñas, Marco, Intellectual Property Rights, Trade Agreements,
and International Trade (September 1, 2017). Available at
SSRN: https://ssrn.com/abstract=3030826 
 Christopher M. Kalanje, Role of Intellectual Property in Innovation and New Product
Development, 2005

 Kenneth W. Dam, The Growing Importance of International Protection of Intellectual

Property, Vol. 21, No. 3 (Summer 1987), http://www.jstor.org/stable/4070593

WEBSITES
 https://www.wipo.int/about-wipo/en/

 https://www.wto.org/english/tratop_e/trips_e/intel2_e.htm

 http://www.mondaq.com/india/x/844028/Trademark/International+Regime+Of+Intellect
ual+Property+Laws+And+Its+Importance+In+Trade