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This Article is written by Charul Mishra, from Symbiosis Law School, Hyderabad. In this article, the author has dealt with the importance of the TRIPS Agreement in the security of Intellectual Property Rights and various aspects of Compulsory Licensing.


In the current times, various intellectual inventions and creativities have a huge importance in this world. While these creativities and ideas become popular and successful, their promotion and protection become very important for the inventor. The protection importantly needed for the trade secrets and layout-designs of the integrated circuits. Moreover, the trademarks and the other intellectual property rights have to be protected in order to guarantee genuineness to the clients of the inventor. In the global trade arena, the extent of products and ventures comprising licensed innovation has expanded drastically, and if the protected innovation security offered by nations is insufficient, then there is a huge threat of contorting the International trade security. 

Nonetheless, in developing nations, even though frameworks existed for the security of licensed innovation, there were numerous nations where the standard of security was insufficient, for instance, the degree of security was restricted or the time for which the work could be protected was bindingly short, or requirement of licensed innovation rights couldn’t be destined to be adequately viable. Indeed, even among developing countries, there were a few nations with frameworks that gave a lot of protection to the new and successful innovations.

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Trips: brief background and overview

Beginning of TRIPS agreement

The IP system is a tool for public policy and it generally aims to promote economic, social and cultural progress by encouraging creative work and technological innovation. In particular, copyright protection and related rights aim mainly at promoting and rewarding creative work. This offers writers and designers a chance to create a profit through their jobs. Other than as an invitation to writers, copyright effectively creates an economic base for cultural and consumer sectors until the privileges of publishers and manufacturers have been approved or delegated.

Hence, for improving global trade security, there is an expanding acknowledgement of the need to build up a structure to guarantee suitable protection to recent innovations. In the licensed innovation field, as of now, there existed various treaties for the global security of the new and genuine innovations, for example, the Paris Convention identified with modern property rights including licenses and trademarks, and the Berne Convention concerning copyright. In any case, with more accentuation being put on the Trade-related areas of Secured innovations, it was viewed as a dire undertaking to achieve global treaty with regards to GATT, with however many countries as could be expected under the circumstances taking part, concerning guidelines of insurance of protected innovation related with Trade. At present, discussions on Trade-Related Aspects of Intellectual Property Rights (TRIPS) have become one of the major innovative areas for discussion in the Uruguay Round of GATT, which began in 1986. Along with other agreements to be concluded in the Uruguay Round, the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs Agreement) was finally concluded at a ministerial meeting in Marrakech, Morocco, in April 1994, and entered into force as part of the WTO Agreement on 1 January 1995.

Organization and process of the TRIPS agreement

The World Trade Organization (WTO) is the legal and administrative framework for the management and growth at the multilateral level of international ties between its 157 members. It aims at creating equal and secure foreign trading arrangements in order to promote exchange & investment and increase worldwide living standards. It is the successor of the former GATT 1947, which was a multilateral agreement. The year’s trade deal was concluded. Under GATT auspices, further trade liberalization was followed up by “trade rounds” with the aim of further cuts in tariffs and enhanced rules.

The Uruguay Round was the 8th round and most detailed phase of trade negotiations. The talks started in 1986 and concluded in 1994. A further significant decrease of customs duties worldwide, the liberalization of textiles and agriculture trading and the adoption of improved laws, was the main outcome of the Uruguay Round. The trading system has also been expanded to new areas of unprecedented commercial relations, including trade in services and intellectual property. The growing economic value and the rising share of these two fields of foreign trade are expressed in this. Moreover, the results included developing a strengthened and integrated dispute settlement system applicable to agreements covered by the World Trade Organization ( WTO).

The TRIPs Agreement covers the protection of intellectual property in trade-related regions to a considerable degree and is seen as a wide-ranging new framework for the protection of intellectual property standards. Furthermore, the TRIPs Agreement has the additional value of being the first legal deal covering all aspects of intellectual property with a variety of concrete clauses. The issues of the defence of intellectual property rights were first addressed at GATT at the Tokyo Round in 1978 as an international trade concern. The Tokyo Round discussed and coordinated policy on international rules to strengthen strategies against counterfeit goods. The World Intellectual Property Organization (WIPO), a specialist body of the United Nations, also addressed the intercontinental security of an intellectual property. Nonetheless, in the sense of WIPO, a variety of issues have been found, including the reality that treaties are impossible to execute, and the WIPO General Assembly may only propose corrective measures; furthermore, the ratification of treaties is focused on the concept of an agreement by all Members, and whether or not the Member States accede to the Treaty is solely left to them.

Consequently, the United States, which wished to strengthen international intellectual property protection, presented the problems of developing countries, their IP protection systems and their management as problems of trade, and, in an attempt to resolve these issues, urged “Trade-related aspects of intellectual property, including trade in counterfeit goods” (TRIPS) to be treated as a bargaining item. Thus, at the GATT ministerial meeting held in Punta Del Este, Uruguay, in September 1986, it was decided to open negotiations on the GSP. The discussion continued and, in January 1987, a decision was made to set up negotiation proposals and bargaining committees in 15 areas. When it was explained why, despite the heated debate between developed and developing countries, all the countries participating in the discussion agreed on the ADPIC negotiations, the Uruguay Round Agreement was adopted in the form of a single, overall undertaking. Although the TRIPS agreement itself, which resulted from the TRIPS negotiations, was disadvantaged to the developing countries, there were other negotiating areas, such as agriculture and textiles, that brought about results that benefited developing countries.

Compulsory licensing

The provisions of the Paris Convention relating to the protection of patents included the right to a priority scheme, the patents’ freedom in different countries, the appointment of the inventor to the patent, the patentability of inventions in cases of restrictions on the sale, mandatory authorizations for the non-workable time in cases of fee payment, the restitution of patents or cases of non-committal. However, there are no substantive provisions relating to patent protection in the Paris Convention, including the patentable subject-matter, effects of patent rights and duration of patent protection. It was also problematic because compulsory license provisions were unclear in cases of failure to work. Accordingly, the terms of the TRIPS agreement provide for patentable subject-matter, the consequences of patent rights, the duration of patent protection and other specific provisions relating to patent protection. Detailed and express provisions concerning compulsory licences are also available.

Conditions for compulsory licensing under TRIPS

The TRIPS Agreement lays down specific and comprehensive rules relating to mandatory licences, for which the right holder has not been approved, for certain purposes so as to ensure they are provided in certain cases by clarifying the conditions in which these can be issued. The following are the relevant provisions:

  • Such usage shall be considered in accordance with its merits. 
  • This usage can only be allowed if the proposed user has made attempts, in the light of fair business conditions before such usage, to obtain permission from the right holder and has failed to do so within a reasonable period of time. 
  • This shall be restricted to the reason for which the application has been approved and only for non-profit public use or to remediate a practice found to be anticompetitive following the judicial or administrative process with respect to semiconductor technology.
  • This use is non-exclusive. This use is not assignable except for the part of the organization or 33 goodwill that profits from that use. Every such use shall primarily be approved by the Member approving such use for the supply of the internal market. Subject to reasonable security of the legitimate interests of the individuals so allowed, the authorisation for such use shall be liable for termination if and where the circumstances leading to it cease to occur and are unlikely to recur.
  • In each case, in accordance with the economic value of the authorisation, the right holder shall receive sufficient remuneration.
  • Members shall not apply the above terms where such use is permitted to remedy a practice established as anti-competitive following a judiciary or administrative process. Where such use shall be allowed in the absence of an infringement of another patent, the following further conditions shall apply: (a) substantial technological progress made with regard to the invention claimed in the second patent, with a major economic significance as regards the invention in the first patent, (b) an owner of the first Valid patent and (c) the usage permitted for the first patent, except with the assignment of the second patent, shall not be assignable.


This article can be concluded by stating that apart from the importance of the TRIPS treaty, still, there are various contentions and loopholes of the Treaty which have been raised by the developing country. Apart from such tensions, the TRIPS Agreement is considered as the most comprehensive regime which happened to protect Intellectual property rights. It supplements and manifests the old conventions regulating IPRs, of which the most important were first drawn up at the end of the 19th century. Certainly, these conventions were updated regularly, often in Paris, to facilitate a quasi-uniform international control of intellectual property and copyrights gradually and incrementally. But compared to the outcomes of these revision exercises, the TRIPS Agreement represents a significant conceptual leap that fundamentally alters not only the sense in which IPRs are viewed internally, but also their practical sense, and the methods for implementing and resolving disputes. Thus, IP has taken a big jump with the Agreement on Globalization and TRIPS. This is all the more shocking as IP’s political economy has moved from the periphery to a far more central position in global policy analysis in the last decades. In 2007, the IP question was no longer considered solely a technical concern of interest only to lawyers and professional policy analysts.

Of course, it should be noted that the extraordinary importance of IPRs, especially patents, has come with the boom of the industrial economy. Besides, the TRIPS has also started working well with the position of the status of WIPO as the UN’s only professional agency on global intellectual property issues. Salmon argues that TRIPS was after all a good business for WIPO, not only because it incorporated the provisions of the fundamental treaties of the WIPO, the Paris Conventions and the Berne Conventions as its basis, but also because it provided the opportunity for the WIPO to restore itself quickly to the confidences of the developed countries. Although WTO has been a leading body for dealing with global IP problems since the implementation of TRIPS, WIPO has never been in dispute with the former.


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