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Trade Matters - Intellectual Property
PDF version (360KB)
Proposed draft TRIPS Council decision on the establishment of a multilateral system of notification and registration of geographical indications for wines and spirits
PDF version (156 KB)
Intervention by NZ on the protection of traditional knowledge at the TRIPS Council - September 2002
Declaration on the TRIPS Agreement and public health - Ministerial Conference at Doha 14 November 2001

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Home > Trade and Economic Relations > NZ and the WTO > Rules For International Trade > Intellectual Property

New Zealand and the World Trade Organisation

Intellectual Property

People can be given special rights to prevent others from using their inventions, designs or other creations. These rights give rise to a type of property - "intellectual” property - which comes in a variety of forms. The best known forms are copyright (covering books, paintings, films or any other expression of an idea), patents (for inventions) and trademarks (under which brand names and logos can be registered). The objective of intellectual property protection is to strike a balance between innovation and the transfer of technology, so as to benefit both producers and users, and to enhance economic and social welfare.

Overview and background to the WTO Trade Related Aspects of Intellectual Property (TRIPS) negotiations

How are intellectual property rights different from ordinary property rights?
Why is an international agreement on intellectual property necessary?
How are copy-cats stopped?

Overview and Background to the TRIPS Agreement and WTO Negotiations

Paragraph 39 of the Hong Kong Ministerial Declaration (December 2005), on implementation issues, requests the Director-General to "intensify" his consultative process on the issues of Geographical Indications (GIs) extension and the relationship between the Convention on Biological Diversity and the TRIPS Agreement and for the General Council to review progress and take "any appropriate action" no later than 31 July 2006. The declaration also directs an intensification of the negotiations on the establishment of a multilateral register for wine and spirit GIs. In view of the July 2006 temporary suspension of the Doha Round, this deadline has not been met.

How are intellectual property rights different from rights in ordinary property?

They differ from ordinary property - goods and land - in two ways:

possession of them is not exclusive because they are infinitely reproducible. For example, an owner of a car can prevent others from using it, but it is difficult for the writer of a song to prevent someone else from singing it. If the car is sold or destroyed, the owner no longer has possession of it, but a bad public performance of a song does not destroy it as an original work.
their value lies in the information and creativity they contain. Books are worth much more than the paper on which they are printed. Likewise, a software programme has a higher value than the metal and plastic of the disk on which it is sold. Much of the value added to intellectual property reflects the cost of research, design and testing involved in producing goods (such as in pharmaceuticals and high technology products). Many products that have been traded as low-technology goods or commodities in the past may now contain a higher proportion of invention and design in their value. Examples of this are branded clothing and new varieties of plants.

Why is an international agreement on intellectual property necessary?

Ideas and knowledge have become an increasingly important part of commerce, but the ways in which intellectual property rights are protected and enforced vary from country to country. Production of counterfeit clothing, computer software, music and videos, for example, in countries with lower standards of protection causes tension in international relations. The Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement sets out minimum standards of protection from copying that are applied internationally to reduce these tensions. The World Trade Organisation (WTO) Agreement on TRIPS has narrowed the differences in the way these rights are protected around the world by bringing them under common international rules - though it is far from comprehensive.

How are copy-cats stopped?

If the creator or inventor is granted patent or copyright protection, then they have the right to stop other people making unauthorised copies for a limited time. This temporary monopoly acts as an incentive to encourage the development of new inventions and creations, by facilitating the recovery of the costs of developing them while eventually making them freely available to all.

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Trade Related Aspects of the Intellectual Property (TRIPS) Agreement

The provisions of the TRIPS Agreement cover five broad areas:

(1) Application of the basic principles of the multilateral trading system to intellectual property

The TRIPS Agreement extends to intellectual property the two fundamental principles of non-discrimination central to the original General Agreement on Tariffs and Trade (GATT). These are national treatment (the requirement that WTO members must treat foreign products no less favourably than their own), and most-favoured-nation treatment (a concession made to any other member must be extended to benefit all members). National treatment is also a key principle in other intellectual property agreements that predate the TRIPS Agreement.

(2) Protection of intellectual property rights

The main purpose of the TRIPS Agreement is to ensure that adequate standards exist for protection of intellectual property and are observed by all members. The Agreement creates a general obligation to observe many of the provisions of the main existing international treaties on intellectual property: the Paris Convention for the Protection of Industrial Property (patents, industrial designs, etc.) and the Berne Convention for the Protection of Literary and Artistic Works (copyright) even if members are not party to those treaties. In some areas the TRIPS Agreement builds on the Paris and Berne Convention standards by adding a number of new or higher standards:
Copyright
The TRIPS Agreement requires that computer programmes be protected as literary works under the Berne Convention. Databases must also be protected as intellectual creations.
International copyright rules are extended to cover rental rights. Authors of computer programmes and producers of sound recordings must have the right to prohibit the commercial rental of their works to the public. Members need not apply this right to films, however, unless commercial rental has led to widespread copying, affecting copyright-owners' potential earnings from their films.
Performers must also have the right to prevent unauthorised recording, reproduction and broadcast of live performances (bootlegging) for the lifetime of the performer or no less than 50 years. Producers of sound recordings have the right to prevent their unauthorised reproduction for a similar period.
Trademarks
The TRIPS Agreement defines the types of signs that must be eligible for protection as trademarks and sets out the minimum rights to be conferred on their owners. Service marks must be protected in the same way as trademarks used for goods. Marks may be registered for no less than seven years at a time, and registration must be renewable indefinitely.
Geographical indications
Some products have names identical to or derived from the names of places where they were first made or with which they have a strong association. The best known example is "champagne". Others include "port" wine, "Parmesan" and other cheeses. The use of a place name to describe a product in this way - a "geographical indication" - usually identifies both its geographical origin and some unique characteristic, quality or reputation attributable to that origin. So using a place name for a product when it is made elsewhere or lacking the special characteristics concerned can mislead consumers.
The TRIPS Agreement requires members to prevent the misuse of geographical indications, including by deregistration of misleading trademarks. The TRIPS Agreement has special provisions protecting place names used to identify wines and spirits, even where there is no danger of the public being misled. Some exceptions are allowed, for example if the name is already protected as a trademark or if it has become a generic term (such as "cheddar", a description that long ago became common for a type of cheese, even when it is not made in the English village of Cheddar).
Industrial designs
Industrial designs must be protected for at least 10 years. Owners of protected designs must be able to prevent the manufacture, sale or importation of articles bearing or embodying a design that is a copy of the protected design.
Patents
A minimum term of 20 years of patent protection must be available for inventions. Patent protection must be available for both products and processes in all fields of technology, though members may exclude from patentability inventions whose commercial exploitation is prohibited for reasons of public order or morality. They can also exclude diagnostic, therapeutic and surgical methods, plants and animals other than microorganisms, and biological (though not microbiological) processes for the production of plants or animals. Plant varieties, however, must be protectable either by patents or by some other special system (such as the breeder's rights provided in the conventions of the International Union for the Protection of New Varieties of Plants), or a combination of both.
If a patent is issued for a production process, then the rights must extend to the product directly obtained from the process. Certain exceptions are created by the TRIPS Agreement. For example, if a patent-holder fails to supply the product on the market, member governments may allow a competitor to produce the product or do so themselves, though only under conditions safeguarding the legitimate interests of the patent-holder.
Integrated circuit layout designs
The TRIPS Agreement creates an obligation for members to protect integrated circuit designs ("topographies") in accordance with certain provisions of the Washington Treaty on Intellectual Property in Respect of Integrated Circuits (an instrument that, despite having been adopted in 1989, has not yet entered into force). Protection for integrated circuit designs must last for at least 10 years.
Undisclosed information and trade secrets
Members must protect trade secrets and other types of "undisclosed information" that have commercial value against breach of confidence and other acts contrary to honest commercial practices, provided reasonable steps have been taken to keep the information secret. Test data submitted to governments in order to obtain marketing approval for new pharmaceutical or agricultural chemicals are also entitled to protection.
Measures against anti-competitive licensing contracts
Holders of a copyright, patent or other form of intellectual property have the right to issue a licence for someone else to produce or copy the protected trademark, work, invention or design. One consequence of this is that the terms of a licensing contract could restrict competition or impede technology transfer. To counteract this, the TRIPS Agreement permits members under certain conditions to take action to prevent anti-competitive licensing in consultation with each other.

(3) Enforcement of those rights by countries in their own territories

Intellectual property laws are of little use if they cannot be enforced, and much of the remainder of the TRIPS Agreement is devoted to this issue. Members must ensure that intellectual property rights can be enforced under their laws, and that the penalties for infringement are tough enough to deter further violations. The procedures must be:

fair and equitable
not unnecessarily complicated or costly
not entail unreasonable time-limits or unwarranted delays
open to judicial review of administrative decisions
able to be appealed on points of law to a higher court.

The TRIPS Agreement prescribes detailed rules for enforcement of intellectual property rights, including rules for obtaining evidence, injunctions, damages and other penalties, including court orders under certain conditions to dispose of or destroy pirated or counterfeit goods. Members’ laws must provide for provisional measures and ensure that their customs authorities assist intellectual property right holders on request to prevent imports of counterfeit and pirated goods. They must make wilful trademark counterfeiting or copyright piracy on a commercial scale criminal offences.

TRIPS and Access to Medicines

Overview

At the WTO Ministerial Conference in Doha in 2001 Ministers recognised the need for intellectual property right laws to support the protection of public health and promote access to medicines for developing countries. Ministers adopted the Declaration on the TRIPS Agreement and public health, which identified two issues for the TRIPS Council to address:

Ministers agreed to allow least-developed countries a longer transition period so that they do not have to implement patent protection for pharmaceuticals until 1 January 2016. A decision to this effect was agreed and adopted in June 2002.
Ministers instructed the TRIPS Council to find a rapid solution to the problems faced by WTO Members with insufficient or no manufacturing capacity in the pharmaceutical sector to get access to medicines, particularly the affordable, generic versions of patented medicines. A solution to this problem was agreed by the WTO General Council in August 2003, and in December 2005 an amendment to the TRIPS Agreement was adopted.

TRIPS Agreement

When the TRIPS Agreement was negotiated in 1993, developing countries were given a transition period to provide patent protection to pharmaceuticals. They did not have to provide patent protection until 1 January 2005. In the meantime their industries were freely able to produce and export cheap, generic copies of patented drugs. Several countries, including India and Brazil, manufacture large amounts of these medicines. The cost differential between the patented and generic versions of drugs is often considerable - US$930 per person per year for the patented antiretroviral used to treat HIV/AIDS compared to US$295 per person per year for the generic version.

At the Doha Conference, Ministers recognized it was important for developing countries to continue to be able to access these affordable drugs to help combat the severe health epidemics many of them are facing. In light of this it was agreed that developing countries should have a longer transition period, until 2016, to implement patent protection to pharmaceuticals. A decision to this effect was agreed and adopted in June 2002.

However, the extended transition period did not cover being able to export generic drugs, which meant that after 2005 developing countries with no pharmaceutical manufacturing capacity would not be able to access the cheaper generic drugs. Under the extension, developing countries would only be able to allow generic copies of patented drugs to be produced under a compulsory license authorized by the government for the supply of the domestic market. Countries like India and Brazil could continue to produce generic drugs, under a compulsory license but they could no longer export the medicines to other countries even when the drugs were required to address public health crises such as those caused by HIV/AIDS, tuberculosis, malaria and other epidemics. This was a problem for many small, poorer countries that were not able to produce the drugs themselves.

New Zealand position

New Zealand supported the extension of the transition period for developing countries and also welcomed the agreement on TRIPS and medicines. This Agreement was the first genuine "development" achievement in the Doha Development Agenda and an important outcome for developing countries.

Proposed Amendment to the TRIPS Agreement

Ministers agreed at Doha that a solution needed to be found so that countries without manufacturing capacity to produce the generic drugs themselves could still get access to lower cost generic medicines. Negotiators came close to an agreement in 2002, but the proposal failed to reach consensus support, particularly because of concerns from the US. The US pharmaceutical industry was concerned the solution was too broad and could allow developing countries to use the system to access drugs that were not for grave public health problems. They were also concerned that drugs could be diverted to richer countries.

A solution was found to the problem in the lead-up to the fifth WTO Ministerial meeting in Cancun in August 2003. It involved an accompanying statement to the agreement setting out common understandings about how it would work in practice that would prevent abuse. WTO members agreed an amendment to the TRIPS Agreement and adopted it in December 2005.

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Geographical Indications

The TRIPS Agreement defines geographical indications (GIs) as “indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin”.

There are two GI issues being discussed in the Doha Development Agenda.

A multilateral register of GIs for wines and spirits
Extension of protection of GIs

When the TRIPS Agreement was finalised in 1996, it established two different levels of protection for GIs. GIs for products other than wines and spirits (eg Roquefort for cheese) are protected under the rules in Article 22 of TRIPS, which are geared towards protecting against consumer deception and unfair competition. They allow other producers to use terms that may be protected as GIs, provided the use of the term does not suggest to consumers that the product actually comes from the place where the GI originated, or where the use of the GI constitutes an act of unfair competition.

Article 23 of the TRIPS Agreement sets out more stringent rules for the protection of GIs for wines and spirits. Under these rules, GIs for wines or spirits (e.g. champagne) can not be used by any producer from a different area even when the true origin of the product is labelled (e.g. champagne produced in New Zealand) or where the GI is used in conjunction with a word such as “like” or “style” (e.g. methode champenoise). Unlike Article 22, Article 23 establishes an absolute prohibition on use of a geographical indication: rather than a prohibition on misleading or anticompetitive use. The TRIPS Agreement allows some exceptions to Article 23 protection. In Article 24, for instance, a member does not have to provide GI protection if that term has become the “generic” name of a product in that country or if there is already an existing trademark in the country that has the GI in it.

(1) A Multilateral Register for Geographical Indications for Wines and Spirits

At the time the TRIPS Agreement was negotiated, the European Union argued that even more needed to be done to protect wine and spirit GIs. In response to this, Article 23.4 of the Agreement provided that WTO Members should enter into negotiations to establish a multilateral system of notification and registration of GIs for wines and spirits.

Ministers agreed (in paragraph 18 of the Doha Ministerial declaration) to negotiate the establishment of a multilateral register of geographical indications for wines and spirits by the fifth WTO Ministerial Conference in September 2003. The deadline at Cancun was missed because members remain strongly divided over key issues. In July 2004, and again at the Hong Kong Ministerial Conference (December 2005), members reaffirmed their commitment to pursue the negotiations actively in order to find an agreed outcome within the framework of the Doha Development Agenda.

New Zealand position

New Zealand favours the establishment of a multilateral system that:

facilitates protection for individual GIs, without creating additional legal obligations – particularly for those countries that decide not to participate
is administratively simple and cost effective
is voluntary
acts as a transparent informational tool
accommodates different national approaches to GI protection.

New Zealand has co-sponsored a paper on the register that embodies these principles - Proposed draft TRIPS Council decision on the establishment of a multilateral system of notification and registration of GIs for wines and spirits - 1 April 2005 (html version) (PDF 156KB).

At the other end of the spectrum in this negotiation is the EU proposal [external link to WTO website, simple search/document symbol TN/IP/W/11], which New Zealand is strongly resisting. The EU is proposing a register for GIs for all products (not only GIs for wines and spirits) that would have full legal effect and be binding on all WTO members regardless of whether they wish to register GIs of their own.

(2) Extension of Protection for Geographical Indications

Some countries argue that the level of protection provided by Article 22 has not been sufficient to prevent other producers from “free-riding” on the reputation of their GIs by using them to label their products. They advocate increasing the level of protection for GIs for other products, so that they are subject to the same stringent requirements as GIs for wines and spirits.

At Doha, Ministers agreed to consider the issue of "extension". Since December 2004, informal consultations have been taking place on this issue under the auspices of the WTO Deputy Director-General.

New Zealand position

New Zealand considers that extension of Article 23 protection to all products would impose considerable costs upon producers, consumers and, potentially, governments. We are opposed to the extension of the higher level of protection afforded to GIs for wines and spirits to GIs for other products because in our view:

the existing level of protection is already sufficient to protect GI-owners’ interests and we see no logical basis for needing to increase it.
the higher level of protection does not include safeguards that exist in other forms of intellectual property and could give GIs precedence over other forms of intellectual property such as trademarks.
there is no agreed international interpretation of the TRIPS definition of a geographical indication and the concept has been interpreted very broadly by some countries. Extending the higher level of protection for wines and spirits to all products, could give some countries an avenue to lock up a wide range of terms which are considered to be generic product descriptors in other countries.

Traditional Knowledge

The TRIPS Council is charged with discussing three inter-related issues under this heading. It must consider:

the specific issue of how to adequately protect traditional knowledge and folklore using intellectual property rights
whether to amend the provisions of Article 27.3(b) of TRIPS, which allows WTO Members to exclude plants and animals from patentability
the relationship between the TRIPS Agreement – which allows for the creation of private rights over inventions based on genetic resources (through patents) – and the Convention on Biological Diversity – which provides that countries have sovereign rights over their genetic resources.

Within the TRIPS Council there are many opposing views on each of these issues. In order to facilitate future discussions, the WTO Secretariat produced three papers that summarise the key points made by Member economies [external links to the WTO website, document symbols: IP/C/W/368, IP/C/W/369, IP/C/W/370, all documents 8 August 2002].

New Zealand position

To date New Zealand has not taken a position on the specific issues before the TRIPS Council. Some of the issues under discussion (for example the provisions on patents) are being considered domestically, and we wish to ensure our international position reflects the conclusions reached within New Zealand. The issues are complicated by the fact that the rights of indigenous peoples, and the related issue of how to protect traditional knowledge, are currently under discussion in a number of different international fora, so there is a need to ensure there is a consistent approach across these various fora.

Link to New Zealand's intervention at the TRIPS Council meeting in September 2002 – Protection of traditional knowledge.

Trade Marks Act 2003

A new Trade Marks Act came into force in August 2003, providing the Commissioner of Trade Marks with the power to refuse to register a trade mark where its use or registration would be likely to offend a significant section of the community, including Māori. A Māori Advisory Committee was established to advise the Commissioner on whether a proposed use or registration of a trade mark derived from a Māori text or image is, or is likely to be, offensive to Māori.

Proposed amendments to Patents Act

Proposed amendments to the Patents Act provide for the establishment of a Māori Consultative Committee. The aim of the committee is to advise the Commissioner of Patents on patent applications for inventions that involve the use of traditional knowledge or indigenous plants and animals. This will assist in determining whether or not such inventions meet the criteria for granting a patent, including whether the commercial exploitation of such inventions may be contrary to Māori values. A Patents Bill making these amendments is planned to be introduced to Parliament in late 2005.

The Ministry of Economic Development has a work programme in place to examine the interface between intellectual property and traditional knowledge. For more information go to the traditional knowledge section of the Ministry of Economic Development's website [external link].

New Zealand is also providing technical assistance to the Secretariat of the Pacific Community (SPC) to assist the development of national sui generis systems in Pacific Island countries and territories for the protection of traditional knowledge and expressions of culture. For more information go to Pacific Island Initiatives - fact sheet [external link to MED website].

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Page last updated: Friday, 25 January 2008 18:12 NZDT

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