Understanding IP: How ‘TRIPS-PLUS’ has changed the regime of IP protection

The author in the previous post of Understanding IP talks about Trade-related Aspect of Intellectual Property Rights (TRIPS). TRIPS has gained substantial attention over the globe by providing various regulations to structure minimum standards for the protection of Intellectual Property in domestic law. In the previous piece, the author analyzes how the TRIPS agreement tries to provide more freedom to the developed countries and less to the developing countries despite various exceptions. Like for example, Article 8 of the TRIPS in the very first move explains the principle that the member states are free to adopt measures that could protect public health and nutrition and to promote the public interest in sectors of vital importance, provided such measures are consistent with the provision of agreements. TRIPS does provide rights for the benefit of IP holders but it also leaves a lot of scope for the developing nation to exercise various flexibilities in terms of domestic regulations and the socio-economic condition prevalent. But still, developing countries were very adamant about not adopting these measures; the obvious reason might be the threat of sanctions.

In the present piece, continuing the same discussion, the author will discuss the scope of TRIPS in the context of developed and developing countries. This piece will be dedicated to analyzing the concept of TRIPS-PLUS provisions. Well, there is no such international agreement by the name of TRIPS-PLUS. This provision gets its recognition under the stricter implementation of IP laws, mostly advanced by the developed countries. While getting the overview of TRIPS in the previous piece, the author argued that the provisions of the TRIPS provide a minimum standard that the member states must give effect in their domestic law. These minimum standards are generally not accepted by the developed countries, which advances stricter protection for the IP law. Having no such prescription of a stronger policy for IP protection in the TRIPS, multiple provisions are advanced by developed countries to create stricter compliance of IP protection. This certainly remains outside the scope of TRIPS provisions. Therefore looking from a broader perspective, these protections go beyond the minimum standards as specified in TRIPS and hence it is called as TRIPS-PLUS provision. To get it more clarified, the TRIPS-PLUS provision does not contain any provision from the TRIPS, but rather they are standards more than the minimum standards of TRIPS.

Article 1.1 of the TRIPS plays a major role in introducing the TRIPS-PLUS provisions. It says that “Members may, but shall not be obliged to, implement in their law more extensive protection than is required by this agreement, provided that such protection does not contravene the provisions of this Agreement.” We can observe two things from Article 1. First, the article nowhere stops any members to adopt strict measures for intellectual property protection. Using this contention, the developed countries often try to develop stricter policies, not contravening the TRIPS provisions. Secondly, it does not make any obligation to any countries for adopting those strict measures. So, the country is free to adopt those measures and can negate them. Despite getting such relaxation, developing and poorer countries tend to adopt those measures. This issue was addressed by the author in the previous post. Reiterating the same for readers, the author notes“trips do provide rights for the benefit of IP holders but it also leaves a lot of scopes for the developing nation to exercise various flexibilities in terms of domestic regulations and the socio-economic condition prevalent. But a close study by various academicians has shown that the developing countries seldom use these flexibilities in their domestic law. The reason might not be that easy to answer but it can be assumed that there seems to be a fear of sanction by the developed countries.”

The author feels that multiple factors play a major role in the economic development of a country. In that segment, free trade agreements (FTAS) among countries are most sought for increasing the ambit of trade. The developed countries often put conditions for agreeing; and in this, advocating stronger protections of IP form a part of it. Therefore, it is in the form of those agreements mostly, where the countries, especially developing and poor are obliged to agree upon stricter IP compliance and hence, TRIPS-PLUS. Several pieces of research on these aspects have often tried to demonstrate various issues about the role of IP and the developing countries. The larger question that lies with the researchers in this area is whether entering into FTAS with the developed countries has bought any success for the developing countries. There are studies on the impact of IPR on the economy, but most of them have researched keeping developed countries into consideration.

There are two sides of the story. One is the aspect of promoting stricter compliance of IP protection for economic growth. As specified earlier, entering into FTAS and agreeing on most of the terms of the agreement can result in heavier compliance and an obligation to provide a structural approach for stronger IP protection. This obligation does not consider the existing economic condition of that developing country and drives the reforms totally in favour of developed countries’ mechanism. Nevertheless, the author believes that such inclusion benefits the developing countries in their pursuit of increasing trade and investment. The investment in multiple sectors can give an overall boost to the economy. This will substantiate my second perspective about the benefit that arises from such IP protection. One aspect about increasing trade and investment is clear. But can it be argued that IP protection in general, is increasing the lead to the proportion of investment being generated under FTAS? Probably this might be a difficult question, owing to the lack of clarity on the actual result from the IP side. Some of the studies done on this aspect do not provide any solid proof of the impact of stricter IP compliance on the economic growth of the country. Therefore, this area seems to be clouded with ambiguity.

The TRIPS-PLUS mandate is not a new idea and we can observe multiple older instances where such a system was on the priority agenda of developed countries such as the United States. Various academicians have often criticized the US for not working for the creation of a level playing field for developing countries and instead focused on ‘higher standards’ for IP protection, as early in 2002, just 8 years after TRIPS came into force. In 2002, the US and Singapore FTA negotiation saw a greater reliance on a ‘higher standard’ as was visible with the then President Bush’s policy with regards to the bilateral and free trade agreements. Undoubtedly, the standards which were negotiated were more than the general standards in TRIPS. The agreements, be it Bilateral Trade Agreement or the FTAS, with the US or EU as a party, were aimed for TRIPS-PLUS and developing countries have relied on such reformation due to the reason of getting larger market or a threat to sanctions. Moreover, as argued by various academicians, free trade was not a ‘free-trade’ but was a trade of imposing heavy protection for their own benefit. An interesting recommendation was put forth in the 2002 Commission of Intellectual Property Rights by the UK which says,

We believe that developed countries should discontinue the practice of using regional/ bilateral agreements as a means of creating TRIPS-PLUS IP regimes in developing countries as a matter of course. Developing countries should be free to choose, within the confines of TRIPS, where to pitch their IP regimes.

This recommendation might come as a surprise at a time when developed countries were continuously fulfilling their mandates of stricter IP protection. Nevertheless, no one paid any heed to this recommendation and TRIPS-PLUS continued to see the dawn of the morning. Concentrating on the pharmaceutical industry, TRIPSPLUS has a humongous effect on this sector. Right from the grant of the patent for an originator to the huge generic pharmaceutical market, it has impacted almost all such areas. In the upcoming piece, the author will delve into the perspective of how TRIPS-PLUS impacts the pharmaceutical industries and especially the generic market.

analysis

(Views are personal)