Intellectual property rights:

This  is another area like services  that was brought into the multilateral trading system at the instance  of the major developed countries. The subject of IPR is very much different from trade. Also, it is about  the protection of monopoly on the IPR and is thus far  removed from  the principle of free  trade that is  the basis of the WTO. Hence  it just does not have a place  in  the WTO; and yet it is  there because the major developed countries  insisted on it.

The  framework for  the protection of IPR in the WTO is contained in the Agreement  on TRIPS. It  lays down disciplines in  seven areas of the IPR:  patent, copyright, trademark, geographical indication, industrial design, integrated circuits and undisclosed information. Some of these were already covered by some earlier  international agreements; yet there was seen  to be a need for this new agreement. This is mainly because the earlier agreements, most of which were within the  framework of  the World  Intellectual Property Organisation, did not have provisions for effective implementation. Now  all these can be implemented and enforced through the dispute settlement mechanism of the WTO (to be explained later in section 5.5). The earlier  treaties, which are still valid and operational, are: the Paris Convention for patents, trademarks and industrial  designs, Berne Convention and Rome Convention  for copyright, and Washington Treaty for layout-designs of integrated circuits.

Need of protection of IPR which is a creation of mind arises from the fact that the inventor/creator should get adequate returns in order to have incentive for innovation. The protection in the form of exclusive right  for production and marketing, for example  in case of a patent, results in relatively high price for the product which is borne  by the consumer  of the IPR product. There is a need of a proper balance between the return to the innovator and  the cost to the consumer. The Agreement  on TRIPS prescribes the minimum standard of protection of the IPR; thus the options for a country to choose  its own balance get restricted to that extent. A country cannot have a lower level of protection; it may, however, have higher levels of protection.

Of  the seven areas of  IPR listed  cove&  by  the Agreement on TRIPS, the patent and the copyright are the most important from the development angle.