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XXXVI. Article 35 and Incorporated
Provisions of the IPIC Treaty
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A. Text of
Article 35
Article 35: Relation to the IPIC Treaty
Members agree to provide protection to the layout-designs (topographies)
of integrated circuits (referred to in this Agreement as “layout-designs”)
in accordance with Articles 2
through
7 (other than paragraph 3 of
Article 6), Article 12 and
paragraph 3 of Article 16
of the Treaty on Intellectual Property in Respect of Integrated Circuits
and, in addition, to comply with the following provisions.
The text of Articles 2 through
7 (other than Article 6.3) and
Articles 12 and 16.3 of the IPIC Treaty appears in Section LXXVII
below.
B. Interpretation and Application of
Article 35 and Incorporated Provisions of the IPIC Treaty
No jurisprudence or decision of a competent WTO body.
XXXVII. Article
36
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A. Text of
Article 36
Article 36: Scope of the Protection
Subject to the provisions of paragraph 1 of Article
37, Members shall consider unlawful the following acts if performed
without the authorization of the right holder:(9) importing,
selling, or otherwise distributing for commercial purposes a protected
layout-design, an integrated circuit in which a protected layout-design
is incorporated, — or an article incorporating such an integrated
circuit only in so far as it continues to contain an unlawfully
reproduced layout-design.
(footnote original) 9
The term “right holder” in this Section shall be understood as
having the same meaning as the term “holder of the right” in the
IPIC Treaty.
B. Interpretation and Application of Article 36
No jurisprudence or decision of a competent WTO body.
XXXVIII. Article
37
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A. Text of
Article 37
Article 37: Acts Not Requiring the
Authorization of the Right Holder
1.
Notwithstanding
Article 36, no Member shall consider unlawful
the performance of any of the acts referred to in that Article in
respect of an integrated circuit incorporating an unlawfully reproduced
layout-design or any article incorporating such an integrated circuit
where the person performing or ordering such acts did not know and had
no reasonable ground to know, when acquiring the integrated circuit or
article incorporating such an integrated circuit, that it incorporated
an unlawfully — reproduced layout-design. Members shall provide that,
after the time that such person has received sufficient notice that the
layout-design was unlawfully reproduced, that person may perform any of
the acts with respect to the stock on hand or ordered before such time,
but shall be liable to pay to the right holder a sum equivalent to a
reasonable royalty such as would be payable under a freely negotiated
licence in respect of such a layout-design.
2.
The conditions set out in
subparagraphs (a) through (k) of Article
31 shall apply mutatis mutandis in the event of any
non-voluntary licensing of a layout-design or of its use by or for the
government without the authorization of the right holder.
B. Interpretation and Application of Article 37
No jurisprudence or decision of a competent WTO body.
XXXIX. Article
38
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A. Text of
Article 38
Article 38: Term of Protection
1.
In Members requiring registration as a condition of protection, the term
of protection of layout-designs shall not end before the expiration of a
period of 10 years counted from the date of filing an application for
registration or from the first commercial exploitation wherever in the
world it occurs.
2.
In Members not requiring registration as a condition for protection,
layout-designs shall be protected for a term of no less than 10 years
from the date of the first commercial exploitation wherever in the world
it occurs.
3.
Notwithstanding
paragraphs 1 and 2,
a Member may provide that protection shall lapse 15 years after the
creation of the layout-design.
B. Interpretation and Application of Article 38
No jurisprudence or decision of a competent WTO body.
XL. Article
39
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A. Text of
Article 39
Article 39
1.
In the course of ensuring effective protection against unfair
competition as provided in Article 10bis of the Paris Convention
(1967), Members shall protect undisclosed information in accordance
with
paragraph 2 and data submitted to governments or governmental
agencies in accordance with paragraph 3.
2.
Natural and legal persons shall have the possibility of preventing
information lawfully within their control from being disclosed to,
acquired by, or used by others without their consent in a manner
contrary to honest commercial practices(10) so long as such
information:
(footnote original) 10
For the purpose of this provision, “a manner contrary to honest
commercial practices” shall mean at least practices such as breach of
contract, breach of confidence and inducement to breach, and includes
the acquisition of undisclosed information by third parties who knew, or
were grossly negligent in failing to know, that such practices were
involved in the acquisition.
(a)
is secret in the sense that it is not, as a body or in the precise
configuration and assembly of its components, generally known among or
readily accessible to persons within the circles that normally deal with
the kind of information in question;
(b)
has commercial value because it is secret; and
(c)
has been subject to reasonable steps under the circumstances, by the
person lawfully in control of the information, to keep it secret.
3.
Members, when requiring, as a condition of approving the marketing of
pharmaceutical or of agricultural chemical products which utilize new
chemical entities, the submission of undisclosed test or other data, the
origination of which involves a considerable effort, shall protect such
data against unfair commercial use. In addition, Members shall protect
such data against disclosure, except where necessary to protect the
public, or unless steps are taken to ensure that the data are protected
against unfair commercial use.
B. Interpretation and Application of Article 39
No jurisprudence or decision of a competent WTO body.
XLI. Article
40
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A. Text of
Article 40
Article 40
1.
Members agree that some licensing practices or conditions pertaining to
intellectual property rights which restrain competition may have adverse
effects on trade and may impede the transfer and dissemination of
technology.
2.
Nothing in this Agreement shall prevent Members from specifying in their
legislation licensing practices or conditions that may in particular
cases constitute an abuse of intellectual property rights having an
adverse effect on competition in the relevant market. As provided above,
a Member may adopt, consistently with the other provisions of this
Agreement, appropriate measures to prevent or control such practices,
which may include for example exclusive grantback conditions, conditions
preventing challenges to validity and coercive package licensing, in the
light of the relevant laws and regulations of that Member.
3.
Each Member shall enter, upon request, into consultations with any other
Member which has cause to believe that an intellectual property right
owner that is a national or domiciliary of the Member to which the
request for consultations has been addressed is undertaking practices in
violation of the requesting Member’s laws and regulations on the
subject matter of this Section, and which wishes to secure compliance
with such legislation, without prejudice to any action under the law and
to the full freedom of an ultimate decision of either Member. The Member
addressed shall accord full and sympathetic consideration to, and shall
afford adequate opportunity for, consultations with the requesting
Member, and shall cooperate through supply of publicly available
non-confidential information of relevance to the matter in question and
of other information available to the Member, subject to domestic law
and to the conclusion of mutually satisfactory agreements concerning the
safeguarding of its confidentiality by the requesting Member.
4.
A Member whose nationals or domiciliaries are subject to proceedings in
another Member concerning alleged violation of that other Member’s
laws and regulations on the subject matter of this Section shall, upon
request, be granted an opportunity for consultations by the other Member
under the same conditions as those foreseen in paragraph
3.
B. Interpretation and Application of Article 40
No jurisprudence or decision of a competent WTO body.
XLII. Article
41
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A. Text of
Article 41
Article 41
1.
Members shall ensure that enforcement procedures as specified in this
Part are available under their law so as to permit effective action
against any act of infringement of intellectual property rights covered
by this Agreement, including expeditious remedies to prevent
infringements and remedies which constitute a deterrent to further
infringements. These procedures shall be applied in such a manner as to
avoid the creation of barriers to legitimate trade and to provide for
safeguards against their abuse.
2.
Procedures concerning the enforcement of intellectual property rights
shall be fair and equitable. They shall not be unnecessarily complicated
or costly, or entail unreasonable time-limits or unwarranted delays.
3.
Decisions on the merits of a case shall preferably be in writing and
reasoned. They shall be made available at least to the parties to the
proceeding without undue delay. Decisions on the merits of a case shall
be based only on evidence in respect of which parties were offered the
opportunity to be heard.
4.
Parties to a proceeding shall have an opportunity for review by a
judicial authority of final administrative decisions and, subject to
jurisdictional provisions in a Member’s law concerning the importance
of a case, of at least the legal aspects of initial judicial decisions
on the merits of a case. However, there shall be no obligation to
provide an opportunity for review of acquittals in criminal cases.
5.
It is understood that this Part does not create any obligation to put in
place a judicial system for the enforcement of intellectual property
rights distinct from that for the enforcement of law in general, nor
does it affect the capacity of Members to enforce their law in general.
Nothing in this Part creates any obligation with respect to the
distribution of resources as between enforcement of intellectual
property rights and the enforcement of law in general.
B. Interpretation and Application of Article 41
1. General
216.
In EC — Trademarks and Geographical Indications (US)
the Panel referred to the definition of “intellectual property” in
Article 1.2 where that term is used in Part III:
“These claims are made under the obligations
with respect to enforcement procedures found in Part III of the TRIPS
Agreement. The obligations in Part III are applicable to acts of
infringement of geographical indications by virtue of the use of the
term “intellectual property” in Part III and the definition of “intellectual
property” in Article 1.2.”(217)
2. Article 41.1
217.
In China — Intellectual Property Rights, the Panel made the
following statement with respect to certain “acts of infringement”
covered by Article 41.1:
“The subject of Section 1 of Part
II is ‘Copyright and Related Rights’. Within Section 1, Article 9.1
incorporates
Articles 1 through
21 of the Berne Convention (1971) and the Appendix thereto, with
the exception of rights conferred under, or derived from, Article 6bis.
Those provisions provide for the grant of various rights to authors in
respect of their literary and artistic works. Any act falling within the
scope of those rights carried out with respect to protected works
without the authorization of the right holder or outside the scope of an
applicable exception is a priori an act of infringement.
Accordingly, an act of infringement of copyright in a literary or
artistic work, as provided for in those provisions of the Berne
Convention (1971) that are incorporated by Article 9.1 of the TRIPS
Agreement, is an ‘act of infringement of intellectual property
rights covered by this Agreement’ within the meaning of the first
sentence of
Article 41.1 of the TRIPS Agreement.”(218),(219)
3. Article 41.2
218.
In Canada — Patent Term, the Panel rejected Canada’s argument
that, in light of a certain amount of delay in granting patent rights,
the term of protection at issue met with the requirements under
Article 33.(220)
In the course of its analysis, the Panel referred to
Article 41.2 as it is applied to acquisition procedures by Article
62.4:
“In our view, requiring applicants to resort to
delays such as abandonment, reinstatement, non-payment of fees and
non-response to a patent examiner’s report would be inconsistent with
the general principle that procedures not be unnecessarily complicated
as expressed in Article 41.2 and applied to
acquisition procedures by
Article 62.4. By their very nature, the
delays, which are not tied to any valid reason related to the
examination and grant process, would be inconsistent with the general
principle that procedures not entail ‘unwarranted delays’ as
expressed in Article 41.2 and applied to
acquisition procedures by
Article 62.4.
We noted in paragraphs 6.107 and 6.108 above that
the Commissioner’s powers to reinstate and restore applications under
Section 30(2) and Section 73 were discretionary at all material times
and not available as a matter of right to patent applicants. Canada
argued, however, that despite the use of the word ‘may’ in Section
73, the payment of the necessary fee enabled the applicant to obtain
reinstatement of his patent application as a matter of right. In other
words, had the Commissioner exercised his discretion to refuse an
application for reinstatement, an applicant would have been required to
pay an additional fee and pursue legal proceedings against the
Commissioner in a court of law in order for a term of protection
expiring 20 years from the date of filing the application to be
available. We find potential requirements that an applicant commence
proceedings for a writ of mandamus and pay additional fees to be in
breach of the general principle that procedures not be ‘unnecessarily
complicated or costly’ as expressed in Article 41.2
and applied to acquisition procedures by
Article 62.4.”(221)
219.
In EC — Trademarks and Geographical Indications (Australia)
the Panel rejected claims under Articles 41.1,
41.2, 41.3 and 42
concerning objections to GI registration because the claims concerned inter
partes procedures related to the acquisition of intellectual
property rights rather than enforcement procedures. Article 41.2
was applicable to such procedures by virtue of Article
62.4:
“Australia’s claims concern an inter partes
procedure permitting objections which is related to the acquisition of
intellectual property rights under the Regulation. As such, it is
covered by Part IV of the TRIPS Agreement, not Part III. The general
principles in Article 41.2 and 41.3
apply to such inter partes
procedures, where a Member’s law provides for them, by virtue of
Article 62.4 of the TRIPS Agreement. However, Article 62.4
is outside the Panel’s terms of reference. Accordingly, the Panel
rejects these claims.”(222)
4. Article 41.3
220.
For the applicability of
Article 41.3 to inter partes
procedures related to the acquisition of intellectual property rights,
see para. 219 above.
5. Relationship
between Article 41 and other Articles of the TRIPS Agreement and the
Berne Convention
221.
In China — Intellectual Property Rights, the Panel reached the
following conclusion with respect to a claim of violation of
Article 41.1:
“The Panel recalls its conclusion … that the
Copyright Law, specifically the first sentence of Article
4, is inconsistent with China’s obligations (with respect to the
rights specially granted by the Berne Convention) under Article 5(1) of
that Convention, as incorporated by
Article 9.1 of the TRIPS Agreement. In the absence of protection of
the rights specially granted by the Berne Convention, there can be no
enforcement procedures against any act of infringement of such rights
with respect to the relevant works.”(223)
XLIII. Article
42
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A. Text of
Article 42
Article 42: Fair and Equitable Procedures
Members shall make available to right holders(11) civil
judicial procedures concerning the enforcement of any intellectual
property right covered by this Agreement. Defendants shall have the
right to written notice which is timely and contains sufficient detail,
including the basis of the claims. Parties shall be allowed to be
represented by independent legal counsel, and procedures shall not
impose overly burdensome requirements concerning mandatory personal
appearances. All parties to such procedures shall be duly entitled to
substantiate their claims and to present all relevant evidence. The
procedure shall provide a means to identify and protect confidential
information, unless this would be contrary to existing constitutional
requirements.
(footnote original) 11
For the purpose of this Part, the term “right holder” includes
federations and associations having legal standing to assert such
rights.
B. Interpretation and Application of Article 42
1. “right holders”
222.
In US — Section 211 Appropriations Act, the Appellate Body
considered that the term “right holders” included not only persons
who had been established as owners of rights but also persons who
claimed to have legal standing to assert rights:
“We agree with the Panel that the term ‘right
holders’ as used in Article 42 is not
limited to persons who have been established as owners of trademarks.
Where the TRIPS Agreement confers rights exclusively on ‘owners’
of a right, it does so in express terms, such as in Article 16.1,
which refers to the ‘owner of a registered trademark’. By contrast,
the term ‘right holders’ within the meaning of Article 42
also includes persons who claim to have legal standing to assert rights.
This interpretation is also borne out by the fourth sentence of Article 42,
which refers to ‘parties’. Civil judicial procedures would not be
fair and equitable if access to courts were not given to both
complainants and defendants who purport to be owners of an intellectual
property right.”(224)
2. Rights covered by
Article 42
223.
In US — Section 211 Appropriations Act, the Appellate Body
considered the nature of the rights covered by Article
42:
“From all this, we understand that the rights
which
Article 42
obliges Members to make available to right holders are procedural
in nature. These procedural rights guarantee an international
minimum standard for nationals of other Members within the meaning of
Article 1.3 of the TRIPS Agreement.”
224.
In US — Section 211 Appropriations Act, the Appellate Body
considered the situation in which a requirement of substantive law made
it impossible for a court to rule in favour of a claim to a trademark
right and found:
“There is nothing in the procedural
obligations of
Article
42 that prevents a Member, in such a situation, from legislating
whether or not its courts must examine each and every
requirement of substantive law at issue before making a ruling.”(225)
225.
In US — Section 211 Appropriations Act, the Appellate Body
applied its findings in respect of Article 42 of the TRIPS
Agreement with regard to holders of rights in trademarks and
holders of rights in trade names as well.(226)
XLIV. Article
43
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A. Text of
Article 43
Article 43: Evidence
1.
The judicial authorities shall have the authority, where a party has
presented reasonably available evidence sufficient to support its claims
and has specified evidence relevant to substantiation of its claims
which lies in the control of the opposing party, to order that this
evidence be produced by the opposing party, subject in appropriate cases
to conditions which ensure the protection of confidential information.
2.
In cases in which a party to a proceeding voluntarily and without good
reason refuses access to, or otherwise does not provide necessary
information within a reasonable period, or significantly impedes a
procedure relating to an enforcement action, a Member may accord
judicial authorities the authority to make preliminary and final
determinations, affirmative or negative, on the basis of the information
presented to them, including the complaint or the allegation presented
by the party adversely affected by the denial of access to information,
subject to providing the parties an opportunity to be heard on the
allegations or evidence.
B. Interpretation and Application of Article 43
226.
In India — Patents (EC), the European Communities claimed —
similarly to the United States’ claim in the earlier case India —
Patents (US) — that India had failed to provide an exclusive
marketing system pursuant to its obligation under Article 70.9 of the
TRIPS Agreement. India argued that a generally available system was
not required under Article 70.9; as support
for its claim, India pointed to the provisions of Articles 42
[sic] to 48 of the TRIPS
Agreement, where the judicial authorities of Members “shall have
authority” to order certain actions and contrasted this wording with
that of Article
70.9, which provides that marketing rights “shall be granted”
when certain conditions are met. The Panel rejected this argument by
India:
“We do not share India’s view that it can be
deduced from the use of these words in those Articles that a system of
general availability is not called for under Article 70.9.
To infer this, one would have to hold that the omission of the words ‘shall
have the authority’ in
Articles 42–48 [sic] (so that a court
was required to act in a certain way when prescribed conditions were
met, rather than merely having the authority to do so) would mean that a
Member would not be expected to give its judicial authorities in advance
the authority to act in this way, for example to award an injunction,
but could legislate to this effect when a specific occasion arose. Such
an inference would obviously be absurd. Rather the function of the words
‘shall have the authority’ is to address the issue of judicial
discretion, not that of general availability.”(227)
XLV. Article
44
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A. Text of
Article 44
Article 44: Injunctions
1.
The judicial authorities shall have the authority to order a party to
desist from an infringement, inter alia to prevent the entry
into the channels of commerce in their jurisdiction of imported goods
that involve the infringement of an intellectual property right,
immediately after customs clearance of such goods. Members are not
obliged to accord such authority in respect of protected subject matter
acquired or ordered by a person prior to knowing or having reasonable
grounds to know that dealing in such subject matter would entail the
infringement of an intellectual property right.
2.
Notwithstanding the other provisions of this Part and provided that the
provisions of Part II specifically
addressing use by governments, or by third parties authorized by a
government, without the authorization of the right holder are complied
with, Members may limit the remedies available against such use to
payment of remuneration in accordance with subparagraph (h) of Article
31. In other cases, the remedies under this Part shall apply or,
where these remedies are inconsistent with a Member’s law, declaratory
judgments and adequate compensation shall be available.
B. Interpretation and Application of Article 44
227.
With respect to the meaning of the words “shall have the authority”
as used in Articles 43–48,
see
paragraph 226 above.
XLVI. Article
45
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A. Text of
Article 45
Article 45: Damages
1.
The judicial authorities shall have the authority to order the infringer
to pay the right holder damages adequate to compensate for the injury
the right holder has suffered because of an infringement of that person’s
intellectual property right by an infringer who knowingly, or with
reasonable grounds to know, engaged in infringing activity.
2.
The judicial authorities shall also have the authority to order the
infringer to pay the right holder expenses, which may include
appropriate attorney’s fees. In appropriate cases, Members may
authorize the judicial authorities to order recovery of profits and/or
payment of pre-established damages even where the infringer did not
knowingly, or with reasonable grounds to know, engage in infringing
activity.
B. Interpretation and Application of Article 45
228.
With respect to the meaning of the words “shall have the authority”
as used in Articles 43–48,
see
paragraph 226 above.
XLVII. Article
46
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A. Text of
Article 46
Article 46: Other Remedies
In order to create an effective deterrent to infringement, the
judicial authorities shall have the authority to order that goods that
they have found to be infringing be, without compensation of any sort,
disposed of outside the channels of commerce in such a manner as to
avoid any harm caused to the right holder, or, unless this would be
contrary to existing constitutional requirements, destroyed. The
judicial authorities shall also have the authority to order that
materials and implements the predominant use of which has been in the
creation of the infringing goods be, without compensation of any sort,
disposed of outside the channels of commerce in such a manner as to
minimize the risks of further infringements. In considering such
requests, the need for proportionality between the seriousness of the
infringement and the remedies ordered as well as the interests of third
parties shall be taken into account. In regard to counterfeit trademark
goods, the simple removal of the trademark unlawfully affixed shall not
be sufficient, other than in exceptional cases, to permit release of the
goods into the channels of commerce.
B. Interpretation and Application of Article 46
1. General
229.
In China — Intellectual Property Rights, the Panel resolved the
ambiguity of meanings of the term “such requests” in the third
sentence of Article 46 by examining the
records of the negotiation of the TRIPS Agreement:
“The third sentence of Article 46
refers to “such requests” although the previous sentences do not
refer expressly to any requests. The content of the third sentence
clearly relates to materials and implements as addressed in the second
sentence but it could equally relate to infringing goods as addressed in
the first sentence. The text is ambiguous on this point. This ambiguity
can be resolved by reference to the records of the negotiation of the
TRIPS Agreement.(228)
…
Accordingly, the records of the negotiation of the
TRIPS Agreement clarify that the terms of Article 46
in the third sentence refer inter
alia to the consideration of requests for orders that infringing
goods be disposed of outside the channels of commerce or destroyed.”(229)
230.
In China — Intellectual Property Rights, the Panel made the
following considerations with respect to the scope of the fourth
sentence of Article 46, which only applies to
remedies with respect to a specific category of infringing goods, i.e.
counterfeit trademark goods:
“The fourth sentence refers to a category of
infringing goods, i.e. counterfeit trademark goods. It does not refer
expressly to authority to order destruction or disposal outside the
channels of commerce. However, the context shows that the principle of
proportionality in the previous sentence guides the competent
authorities’ choice between the remedies specified in the first
sentence and any alternative remedies. Similarly, the fourth sentence of
Article 46 sets out a consideration that the authorities must take into
account when choosing between the required remedies, namely those
specified in the first sentence, and release into the channels of
commerce, if such an order is available. The fourth sentence attaches to
the scope of authority to choose between destruction or disposal outside
the channels of commerce and release into the channels of commerce, if
that remedy is available. Therefore, the fourth sentence of Article 46
seems pertinent to
Article 59.”(230)
231.
In China — Intellectual Property Rights, the Panel considered
that the remedies set out in the first sentence of Article 46
are not exhaustive:
“The first sentence of Article 46
provides, basically, that authorities shall have the authority to order
that goods be disposed of outside
the channels of commerce or destroyed. At the same time, the fourth
sentence of Article 46 relates to release into
the channels of commerce which does not correspond to either of the
remedies required by the first sentence. This is an express recognition
that the remedies set out in the first sentence of Article 46
are not exhaustive.”(231)
XLVIII. Article
47
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A. Text of
Article 47
Article 47: Right of Information
Members may provide that the judicial authorities shall have the
authority, unless this would be out of proportion to the seriousness of
the infringement, to order the infringer to inform the right holder of
the identity of third persons involved in the production and
distribution of the infringing goods or services and of their channels
of distribution.
B. Interpretation and Application of Article 47
232.
With respect to the meaning of the words “shall have the authority”
as used in Articles 43–48,
see
paragraph 226 above.
XLIX. Article
48
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A. Text of
Article 48
Article 48: Indemnification of the Defendant
1.
The judicial authorities shall have the authority to order a party at
whose request measures were taken and who has abused enforcement
procedures to provide to a party wrongfully enjoined or restrained
adequate compensation for the injury suffered because of such abuse. The
judicial authorities shall also have the authority to order the
applicant to pay the defendant expenses, which may include appropriate
attorney’s fees.
2.
In respect of the administration of any law pertaining to the protection
or enforcement of intellectual property rights, Members shall only
exempt both public authorities and officials from liability to
appropriate remedial measures where actions are taken or intended in
good faith in the course of the administration of that law.
B. Interpretation and Application of Article 48
233.
With respect to the meaning of the words “shall have the authority”
as used in Articles 43–48,
see
paragraph 226 above.
L. Article
49
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A. Text of
Article 49
Article 49: Administrative Procedures
To the extent that any civil remedy can be ordered as a result of
administrative procedures on the merits of a case, such procedures shall
conform to principles equivalent in substance to those set forth in this
Section.
B. Interpretation and Application of Article 49
No jurisprudence or decision of a competent WTO body.
LI. Article
50
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A. Text of
Article 50
Article 50
1.
The judicial authorities shall have the authority to order prompt and
effective provisional measures:
(a)
to prevent an infringement of any intellectual property right from
occurring, and in particular to prevent the entry into the channels of
commerce in their jurisdiction of goods, including imported goods
immediately after customs clearance;
(b)
to preserve relevant evidence in regard to the alleged infringement.
2.
The judicial authorities shall have the authority to adopt provisional
measures inaudita altera parte where appropriate, in particular
where any delay is likely to cause irreparable harm to the right holder,
or where there is a demonstrable risk of evidence being destroyed.
3.
The judicial authorities shall have the authority to require the
applicant to provide any reasonably available evidence in order to
satisfy themselves with a sufficient degree of certainty that the
applicant is the right holder and that the applicant’s right is being
infringed or that such infringement is imminent, and to order the
applicant to provide a security or equivalent assurance sufficient to
protect the defendant and to prevent abuse.
4.
Where provisional measures have been adopted inaudita altera
parte, the parties affected shall be given notice, without delay
after the execution of the measures at the latest. A review, including a
right to be heard, shall take place upon request of the defendant with a
view to deciding, within a reasonable period after the notification of
the measures, whether these measures shall be modified, revoked or
confirmed.
5.
The applicant may be required to supply other information necessary for
the identification of the goods concerned by the authority that will
execute the provisional measures.
6.
Without prejudice to paragraph 4, provisional measures taken on
the basis of paragraphs 1 and 2
shall, upon request by the defendant, be revoked or otherwise cease to
have effect, if proceedings leading to a decision on the merits of the
case are not initiated within a reasonable period, to be determined by
the judicial authority ordering the measures where a Member’s law so
permits or, in the absence of such a determination, not to exceed 20
working days or 31 calendar days, whichever is the longer.
7.
Where the provisional measures are revoked or where they lapse due to
any act or omission by the applicant, or where it is subsequently found
that there has been no infringement or threat of infringement of an
intellectual property right, the judicial authorities shall have the
authority to order the applicant, upon request of the defendant, to
provide the defendant appropriate compensation for any injury caused by
these measures.
8.
To the extent that any provisional measure can be ordered as a result of
administrative procedures, such procedures shall conform to principles
equivalent in substance to those set forth in this Section.
B. Interpretation and Application of Article 50
No jurisprudence or decision of a competent WTO body.
LII. Article
51
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A. Text of
Article 51
Article 51: Suspension of Release by Customs Authorities
Members shall, in conformity with the provisions set out below, adopt
procedures(13) to enable a right holder, who has valid grounds
for suspecting that the importation of counterfeit trademark or pirated
copyright goods(14) may take place, to lodge an application in
writing with competent authorities, administrative or judicial, for the
suspension by the customs authorities of the release into free
circulation of such goods. Members may enable such an application to be
made in respect of goods which involve other infringements of
intellectual property rights, provided that the requirements of this
Section are met. Members may also provide for corresponding procedures
concerning the suspension by the customs authorities of the release of
infringing goods destined for exportation from their territories.
(footnote original) 13
It is understood that there shall be no obligation to apply such
procedures to imports of goods put on the market in another country by
or with the consent of the right holder, or to goods in transit.
(footnote original) 14
For the purposes of this Agreement:
(a)
“counterfeit trademark goods” shall mean any goods, including
packaging, bearing without authorization a trademark which is identical
to the trademark validly registered in respect of such goods, or which
cannot be distinguished in its essential aspects from such a trademark,
and which thereby infringes the rights of the owner of the trademark in
question under the law of the country of importation;
(b)
“pirated copyright goods” shall mean any goods which are copies made
without the consent of the right holder or person duly authorized by the
right holder in the country of production and which are made directly or
indirectly from an article where the making of that copy would have
constituted an infringement of a copyright or a related right under the
law of the country of importation.
B. Interpretation and Application of Article 51
1. General
234.
In China — Intellectual Property Rights, the Panel clarified
that the phrase “the provisions set out below” in the first sentence
of Article 51 include the whole of Section 4:
“The description of the procedure as one for an
“application” for “suspension” does not appear to exclude
related aspects of the procedure in the provisions set out below, such
as the provisions on ex
officio action in Article 58 or the
remedies as a result of application and/or suspension set out in Article
59. Rather, the procedures in Section 4 form a set that must be read
together. This is reflected in the second sentence of Article 51
(with respect to other goods, set out below) that refers to “such an
application” (i.e. an application such as that referred to in the
first sentence) being subject to “the requirements of this Section”.
This tends to confirm that the “provisions set out below” Article 51
include the whole of Section 4.”(232)
2. Scope
235.
In China — Intellectual Property Rights the Panel clarified
that “the first sentence of Article 51
provides for the relevant procedures to apply, as a minimum, to ‘the
importation’ of counterfeit trademark or pirated copyright goods”.(233)
The Panel further clarified that the second and third sentences of
Article 51 expressly allow Members, as an option, to provide for
procedures at the border for other infringing goods as well.
“Both these sentences use the word “may”,
indicating that they are optional provisions. The second sentence
provides for an optional extension to “other infringements of
intellectual property rights”. This is a reference both to goods that
infringe trademarks and copyright without constituting counterfeit
trademark goods or pirated copyright goods, as well as to goods that
infringe other categories of intellectual property rights, such as
patents. The second sentence includes an express condition that applies
where Members provide border measures for other infringements of
intellectual property rights, namely “provided that the requirements
of this Section are met”.(234)
The third sentence of Article 51
provides for an optional extension to “infringing goods destined for
exportation” from a Member’s territory. The terms of the third
sentence do not attach any express condition to this option. An option
with respect to “corresponding procedures” is not, on its face, an
obligation that procedures shall correspond. The omission of any express
condition in the third sentence stands in contrast to the proviso in the
second sentence, which also serves the purpose of providing for an
optional extension of the border measures. Whilst it would not have been
appropriate to include an identical condition to that found in the
second sentence, as the requirements of Section 4 refer to importation,
the third sentence could nevertheless have included an express condition
that the procedures with respect to infringing goods destined for
exportation shall correspond to those set out in the Section, or shall
comply with the principles thereof.(235)
However, it does not. Read in context, this omission is not ambiguous.”(236)
LIII. Article
52
back to top
A. Text of
Article 52
Article 52: Application
Any right holder
initiating the procedures under
Article 51 shall be required to provide
adequate evidence to satisfy the competent authorities that, under the
laws of the country of importation, there is
prima facie an infringement of the right holder’s intellectual
property right and to supply a sufficiently detailed description of the
goods to make them readily recognizable by the customs authorities. The
competent authorities shall inform the applicant within a reasonable
period whether they have accepted the application and, where determined
by the competent authorities, the period for which the customs
authorities will take action.
B. Interpretation and Application of Article 52
No jurisprudence or decision of a competent WTO body.
LIV. Article
53
back to top
A. Text of
Article 53
Article 53: Security or Equivalent Assurance
1.
The competent authorities shall have the authority to require an
applicant to provide a security or equivalent assurance sufficient to
protect the defendant and the competent authorities and to prevent
abuse. Such security or equivalent assurance shall not unreasonably
deter recourse to these procedures.
2.
Where pursuant to an application under this Section the release of goods
involving industrial designs, patents, layout-designs or undisclosed
information into free circulation has been suspended by customs
authorities on the basis of a decision other than by a judicial or other
independent authority, and the period provided for in Article
55 has expired without the granting of provisional relief by the
duly empowered authority, and provided that all other conditions for
importation have been complied with, the owner, importer, or consignee
of such goods shall be entitled to their release on the posting of a
security in an amount sufficient to protect the right holder for any
infringement. Payment of such security shall not prejudice any other
remedy available to the right holder, it being understood that the
security shall be released if the right holder fails to pursue the right
of action within a reasonable period of time.
B. Interpretation and Application of Article 53
No jurisprudence or decision of a competent WTO body.
LV. Article
54
back to top
A. Text of
Article 54
Article 54: Notice of Suspension
The importer and the applicant shall be promptly notified of the
suspension of the release of goods according to Article
51.
B. Interpretation and Application of Article 54
No jurisprudence or decision of a competent WTO body.
LVI. Article
55
back to top
A. Text of
Article 55
Article 55: Duration of Suspension
If, within a period not exceeding 10 working days after the applicant
has been served notice of the suspension, the customs authorities have
not been informed that proceedings leading to a decision on the merits
of the case have been initiated by a party other than the defendant, or
that the duly empowered authority has taken provisional measures
prolonging the suspension of the release of the goods, the goods shall
be released, provided that all other conditions for importation or
exportation have been complied with; in appropriate cases, this
time-limit may be extended by another 10 working days. If proceedings
leading to a decision on the merits of the case have been initiated, a
review, including a right to be heard, shall take place upon request of
the defendant with a view to deciding, within a reasonable period,
whether these measures shall be modified, revoked or confirmed.
Notwithstanding the above, where the suspension of the release of goods
is carried out or continued in accordance with a provisional judicial
measure, the provisions of paragraph 6 of Article 50 shall apply.
B. Interpretation and Application of Article 55
No jurisprudence or decision of a competent WTO body.
LVII. Article
56
back to top
A. Text of
Article 56
Article 56: Indemnification of the Importer and of the
Owner of the Goods
Relevant authorities shall have the authority to order the applicant
to pay the importer, the consignee and the owner of the goods
appropriate compensation for any injury caused to them through the
wrongful detention of goods or through the detention of goods released
pursuant to Article 55.
B. Interpretation and Application of Article 56
No jurisprudence or decision of a competent WTO body.
LVIII. Article
57
back to top
A. Text of
Article 57
Article 57: Right of Inspection and Information
Without prejudice to the
protection of confidential information, Members shall provide the
competent authorities the authority to give the right holder sufficient
opportunity to have any goods detained by the customs authorities
inspected in order to substantiate the right holder’s claims. The
competent authorities shall also have authority to give the importer an
equivalent opportunity to have any such goods inspected. Where a
positive determination has been made on the merits of a case, Members
may provide the competent authorities the authority to inform the right
holder of the names and addresses of the consignor, the importer and the
consignee and of the quantity of the goods in question.
B. Interpretation and Application of Article 57
No jurisprudence or decision of a competent WTO body.
LIX. Article
58
back to top
A. Text of
Article 58
Article 58: Ex Officio Action
Where Members require competent authorities to act upon their own
initiative and to suspend the release of goods in respect of which they
have acquired prima facie evidence that an intellectual property
right is being infringed:
(a)
the competent authorities may at any time seek from the right holder any
information that may assist them to exercise these powers;
(b)
the importer and the right holder shall be promptly notified of the
suspension. Where the importer has lodged an appeal against the
suspension with the competent authorities, the suspension shall be
subject to the conditions, mutatis mutandis, set out at Article
55;
(c)
Members shall only exempt both public authorities and officials from
liability to appropriate remedial measures where actions are taken or
intended in good faith.
B. Interpretation and Application of Article 58
No jurisprudence or decision of a competent WTO body.
LX. Article
59
back to top
A. Text of
Article 59
Article 59: Remedies
Without prejudice to other rights of action open to the right holder
and subject to the right of the defendant to seek review by a judicial
authority, competent authorities shall have the authority to order the
destruction or disposal of infringing goods in accordance with the
principles set out in Article 46. In regard to counterfeit
trademark goods, the authorities shall not allow the re-exportation
of the infringing goods in an unaltered state or subject them to a
different customs procedure, other than in exceptional circumstances.
B. Interpretation and Application of Article 59
1. “infringing goods”
236.
In China — Intellectual Property Rights, the Panel clarified
that, when read in context with Article
51, the infringing goods covered by the first sentence of Article 59
are those covered, as a minimum, under Article 51,
i.e. imported “counterfeit trademark or pirated copyright goods”:
“The first sentence of Article 59
applies to “infringing goods”. The ordinary meaning of these words
is not limited to goods that infringe any specific rights. However, read
in context, there are certain limitations. The first sentence of Article 51
provides for the relevant procedures to apply, as a minimum, to “the
importation” of “counterfeit trademark or pirated copyright goods”.
This applies to
Article 59 for the reasons set out … above.”(237)
237.
In China — Intellectual Property Rights, the Panel also
clarified that Article 59, when understood in
context with
Article 51, expressly allows Members, as an
option, to provide for procedures at the border for other infringing
goods:
“The second sentence provides for an optional
extension to “other infringements of intellectual property rights”.
This is a reference both to goods that infringe trademarks and copyright
without constituting counterfeit trademark goods or pirated copyright
goods, as well as to goods that infringe other categories of
intellectual property rights, such as patents. The second sentence
includes an express condition that applies where Members provide border
measures for other infringements of intellectual property rights, namely
“provided that the requirements of this Section are met”.(238)
The requirements of that ‘Section’ include those found in Article 59.
Therefore, to the extent that a Member provides for such an application
to be made in respect of goods involving other infringements of
intellectual property rights, such as patents, the obligation in Article 59
applies.”(239)
238.
The Panel in China — Intellectual Property Rights
further clarified that Article 59, when
understood in context with
Article 51, contains an option, but not an obligation, to provide
for its application to goods destined for exportation:
“The third sentence of Article 51
provides for an optional extension to “infringing goods destined for
exportation” from a Member’s territory. The terms of the third
sentence do not attach any express condition to this option. An option
with respect to “corresponding procedures” is not, on its face, an
obligation that procedures shall correspond. The omission of any express
condition in the third sentence stands in contrast to the proviso in the
second sentence, which also serves the purpose of providing for an
optional extension of the border measures. Whilst it would not have been
appropriate to include an identical condition to that found in the
second sentence, as the requirements of Section 4 refer to importation,
the third sentence could nevertheless have included an express condition
that the procedures with respect to infringing goods destined for
exportation shall correspond to those set out in the Section, or shall
comply with the principles thereof.(240)
However, it does not. Read in context, this omission is not ambiguous.
Therefore, the Panel finds that there is no obligation to apply the
requirements of Article 59 to goods destined
for exportation.”(241),(242)
2. “shall have the
authority”
239.
In China — Intellectual Property Rights, the Panel considered
that, under Article 59, the obligation that
the authorities “shall have the authority” to make certain orders
applies from the time that competent authorities find that goods subject
to suspension at the border are infringing, right until the time a
remedy is ordered:
“The obligation in the first
sentence of
Article 59 is that competent authorities ”shall
have the authority” to order certain types of remedies with respect to
infringing goods. It is clear from the context within Section 4 that the
obligations in Article 59 apply where customs
authorities have suspended the release into free circulation of goods
suspected of infringing intellectual property rights. The fact that Article 59
applies to “infringing goods” indicates that the obligations in this
Article are triggered when competent authorities find that the goods
subject to the suspension are infringing. The fact that Article 59
addresses the authority to order remedies implies that the obligations
continue until the time that a remedy has been ordered. The text of the
Article does not indicate any other limitation on the temporal scope of
the obligations. Therefore, the obligation that competent authorities
“shall have the authority” to make certain orders applies from the
time that competent authorities find that goods subject to suspension at
the border are infringing, right up until the time that a remedy is
ordered.”(243)
240.
In China — Intellectual Property Rights, the Panel also
considered that the phrase “shall have the authority” does not mean,
unless otherwise specified, any obligation that a competent authority
shall exercise its authority in a particular way:
“The Panel notes that the word “authority”
can be defined as “power or right to enforce obedience; moral or legal
supremacy; right to command or give a final decision.”(244)
The obligation is to “have” authority not an obligation to “exercise”
authority.(245) The
phrase “shall have the authority” is used throughout the enforcement
obligations in Sections 2, 3 and 4 of Part III of the TRIPS Agreement,
specifically, in Articles 43.1, 44.1,
45.1, 45.2, 46,
48.1, 50.1, 50.2,
50.3, 50.7, 53.1,
56 and 57.(246)
It can be contrasted with terminology used in the minimum standards of
protection in Part II of the TRIPS Agreement, such as “Members shall
provide” protection, or that certain material “shall be”
protected. The obligation in Article 46 that certain authorities “shall
have the authority” to make certain orders reflects inter alia
that orders with respect to specific infringements are left to
enforcement authorities’ discretion.(247)
…
Therefore, the obligation that competent
authorities “shall have the authority” to make certain orders is not
an obligation that competent authorities shall exercise that authority
in a particular way, unless otherwise specified.”(248)
241.
In China — Intellectual Property Rights, the Panel further
considered that the obligation to have authority to order certain
remedies under Article 59 does not mean that
these are the only remedies a Member can allow its competent authorities
to order. Interpreting Article 59 in context
with Article
41, the Panel stated:
“Moreover, the obligation to have the authority
to order certain types of remedies is not an obligation to have the
authority to order those remedies only. Both parties to the
dispute, and certain third parties, expressly recognize that the
obligation that competent authorities “shall have the authority” to
order certain types of remedies leaves Members free to provide that
competent authorities may have authority to order other remedies
not required to be within their authority by Article 59 of the TRIPS
Agreement.
The Panel agrees. The terms of Article 59
do not indicate that the authority to order the specified types of
remedies must be exclusive. This interpretation is confirmed by Article 46,
which forms part of the context of Article 59,
as Article 59 incorporates the principles of
Article 46, and both Articles are phrased as obligations that
authorities “shall have the authority” to order certain types of
remedies. The first sentence of Article 46
provides, basically, that authorities shall have the authority to order
that goods be disposed of outside
the channels of commerce or destroyed. At the same time, the fourth
sentence of Article 46 relates to release into
the channels of commerce which does not correspond to either of the
remedies required by the first sentence. This is an express recognition
that the remedies set out in the first sentence of Article 46
are not exhaustive. The same position applies under Article 59.”(249)
242.
The Panel in China — Intellectual Property Rights
cautioned however that the fact that Members can provide other remedies
besides those provided under Article 59 can
sometimes be WTO-inconsistent:
“Whilst authority to order a disposition method
not required by
Article 59 does not, in itself, lead to WTO-inconsistent action, to
the extent that such authority mandates a disposition method in any
given circumstance it may preclude authority that is required by Article
59. The preclusion of such authority may be WTO-inconsistent. For
that reason, the Panel will examine whether certain aspects of the
Customs measures are mandatory.”(250)
243.
In China — Intellectual Property Rights the parties disagreed
as to the circumstances in which competent authorities may be considered
to have “authority” in accordance with Article
59, in particular, the extent to which the availability of authority
may be subject to conditions. In this respect, the Panel first observed
that the obligation under the first sentence of Article 59
would be satisfied even if a competent authority has authority to order
only one of the two remedies under that Article:
“The Panel observes that the reference to
alternatives in Article
59 of the TRIPS Agreement implies a particular type of condition.
Article 59 requires authority to order “destruction or disposal”
(emphasis added). It is not disputed that where competent authorities
have authority in any given situation within the scope of Article 59
to order either destruction or disposal (in accordance with applicable
principles), this is sufficient to implement the obligation in the first
sentence of Article 59. Therefore, a condition
that precludes the authority to order one remedy (e.g. destruction)
could be consistent with Article 59 as long
as competent authorities still had the authority to order the other
remedy (in this example, disposal).”(251)
244.
The Panel in China — Intellectual Property Rights then
observed that the phrase “shall have the authority” does not require
Members to take any action in the absence of an application or request:
“The Panel also observes that a common feature
of Sections 2, 3 and 4 of Part III of the TRIPS Agreement is that the
initiation of procedures under these Sections is generally the
responsibility of private right holders. This is reflected in the first
sentence of
Article 42 and the first sentence of Article
51, the reference to an “applicant” in Article 50.3
and 50.5, the reference to “request[s]”
in
Articles
46 and 48.1, and the option (not
obligation) to make ex officio
action available under Article 58. Viewed in
context, the phrase “shall have the authority” does not require
Members to take any action in the absence of an application or request.
Therefore, a condition that authority shall only be available upon
application or request seems to be assumed in much of Sections 2, 3 and
4 of Part III. This is consistent with the nature of intellectual
property rights as private rights, as recognized in the fourth recital
of the preamble of the TRIPS Agreement. Acquisition procedures for
substantive rights and civil enforcement procedures generally have to be
initiated by the right holder and not ex officio.”(252)
3. “disposal”
245.
The Panel in China — Intellectual Property Rights
observed that the “authority” required by Article 59
concerns two types of remedies, namely “destruction or disposal”.
The Panel considered that the meaning of “destruction” was not a
controversial one. As for “disposal”, the Panel considered that it
meant disposal “outside the channels of commerce”:
“[T]he Panel notes that the English text of Article 59
does not qualify this word so that it could, in accordance with its
ordinary meaning, refer both to disposal outside the channels of
commerce as well as to release into the channels of commerce. However,
read in context, the word “disposal” could be a reference to an
order that goods be “disposed of” outside the channels of commerce
as set out in Article
46. This ambiguity is resolved by reference to the French and
Spanish texts, which are equally authentic. The French text of Article
59 refers to authority to order “la mise hors circuit” which is a
reference to the authority to order that infringing goods be “écartées
des circuits commerciaux” in Article 46. The
Spanish text of
Article 59
refers to authority to order “eliminación” which, read in its
context as an alternative to “destrucción”, is evidently a
reference to the authority to order that infringing goods be “apartadas
de los circuitos comerciales” in Article 46.
Accordingly, the correct interpretation of the term “disposal” in
the first sentence of
Article 59 is disposal “outside the channels of commerce”.”(253)
4. “the principles
set out in Article 46”
(a) General
246.
In China — Intellectual Property Rights, the Panel first noted
that the principles set out in Article 46
attach to the obligation in Article 59 to
provide for the “authority to order the destruction or disposal of
infringing goods” and that Article 59 does
not include the authority to the disposition of materials and
implements:
“The first sentence of Article 59
provides that competent authorities shall have the authority to order
the destruction or disposal of infringing goods “in accordance with
the principles set out in Article 46”. The
phrase referencing the principles set out in
Article 46 attaches to “the authority to order the destruction or
disposal of infringing goods”. This directs the treaty interpreter to
those principles in Article 46 that attach to
such authority.(254)
The Panel makes the following
observations. First,
Article 59 refers to “authority”. Second, Article 59
incorporates principles that attach to authority to order “destruction
or disposal” (outside the channels of commerce …). Third, Article 59
relates to the authority to order destruction or disposal of “infringing
goods” but not principles applicable to the disposition of materials
and implements.”(255)
247.
In China — Intellectual Property Rights, the Panel then
considered that the principles set out in Article 46
incorporated in the first sentence of Article 59
were those contained in the third and fourth sentences of Article 46.
The Panel first made the following general considerations with respect
to these principles:
“Article 59
refers to the “principles” set out in
Article 46. Therefore, it is necessary to
determine what precisely that refers to in the first, third and fourth
sentences of Article
46. The word “principles” can be defined as “a general law or
rule adopted or professed as a guide to action.” Each of these
sentences of Article 46 contains language
that is a guide to action by authorities and none dictate the precise
terms of orders in specific cases.
The Panel does not consider that the
choice of the word “principles” was intended to reflect a hierarchy
of provisions within Article 46 that would
include only the most general concepts and exclude the less general.
There is a strong similarity in the language and purpose of the two
provisions that both provide for authority to order destruction or
disposal with respect to goods that have been found to infringe
intellectual property rights at the conclusion of an enforcement
procedure. However, there are also differences in the government
agencies to which they relate (“competent authorities” to order
remedies in border measures under Article 59
but “judicial authorities” under Article 46)
and also in the scope of property to which the remedies apply (“infringing
goods” under Article 59 and “infringing
goods as well as materials and implements the predominant use of which
has been in the creation of the infringing goods” under Article
46). These differences made it inappropriate simply to provide that
the obligation in Article 59 applied “in
accordance with
Article 46” or otherwise incorporate the
whole of Article 46. Instead, the
cross-reference to “principles” avoided the duplication of a
relatively large amount of text. Therefore, in the Panel’s view, the
reference to “principles” is a reference to language that is a guide
to action by authorities with respect to orders for the destruction or
disposal of infringing goods.”(256)
248.
The Panel in China — Intellectual Property Rights then listed
the following principles contained in the first, third and fourth
sentences of Article 46 that serve as guide
to action by authorities with respect to orders for the destruction or
disposal of infringing goods:
“Accordingly, for the purposes of Article
59, the Panel considers that the first sentence of Article 46
sets out the following “principles”:
(a)
authorities shall have the authority to order disposal or destruction in
accordance with the first sentence “without compensation of any sort”;
and
(b)
authorities shall have the authority to order disposal “outside the
channels of commerce in such a manner as to avoid any harm caused to the
right holder”; or
(c)
authorities shall have the authority to order destruction “unless this
would be contrary to existing constitutional requirements”.
The third sentence sets out the following principle that applies inter
alia to the authority to order disposal or destruction of infringing
goods under the first sentence:
(d) in
considering such requests “the need for proportionality between the
seriousness of the infringement and the remedies ordered as well as the
interests of third parties shall be taken into account”.
The fourth sentence sets out the following principle that attaches to
the authority to order destruction or disposal of infringing goods under
the first sentence:
(e) in regard to counterfeit trademark goods, the simple removal of
the trademark unlawfully affixed shall not be sufficient, other than in
exceptional cases, to permit release of the goods into the channels of
commerce.
The interpretation of all these
principles is informed by the common objective set out at the beginning
of Article 46, i.e. “to create an effective
deterrent to infringement” which is, in itself, also a guide to action
with respect to orders for the destruction or disposal of infringing
goods and, hence, a principle set out in Article
46.”(257)
249.
The Panel in China — Intellectual Property Rights
rejected the argument that, in effect, the second sentence of Article 59
constitutes a lex specialis that would exclude the incorporation
of the fourth sentence of Article 46 into Article
59. In rejecting this argument, the Panel made the following
observations with respect to the language of the fourth sentence of Article 46
and the second sentence of
Article 59:
“Like the fourth sentence of Article
46, this sentence begins with the words “[i]n regard to
counterfeit trademark goods” and includes the words “other than in
exceptional” circumstances (as opposed to cases). There is also a
similarity in that the second sentence of
Article 59 applies to goods “in an unaltered state” whilst the
fourth sentence of Article 46 applies to “the
simple removal of the trademark unlawfully affixed” which is a means
of altering the state of counterfeit trademark goods. Both sentences are
found in Articles that provide for remedies after particular enforcement
procedures.
However, Article 59
applies to procedures at the border with respect to goods destined for
importation whilst Article 46 applies to
civil judicial procedures within Members’ territories. The second
sentence of Article 59 refers to re-export or
release into a different customs procedure (for example, into transit)
which is specific to the enforcement procedure in Section 4. Article 46
refers to release into the channels of commerce which can be applicable
to importation and domestic sale in both Sections 2 and 4. The second
sentence of Article
59 and the fourth sentence of Article 46
apply in different circumstances and neither is in fact more specific
than the other.”(258)
(b)
Principle in the first sentence of Article 46: “outside the channels
of commerce in such a manner as to avoid any harm caused to the right
holder”
250.
In China — Intellectual Property Rights the parties disagreed
as to the meaning of the principle set out in the first sentence of Article 46
that refers to disposal “outside the channels of commerce in such a
manner as to avoid any harm caused to the right holder”. The Panel
addressed the meaning of this principle and a concern raised by one of
the parties concerning the harm that donations may cause to right
holders and the possibility that the donated goods may later be sold by
the social welfare bodies:
“The Panel notes that this
principle, by its terms, relates to disposal of goods “outside” the
channels of commerce, and not into the channels of commerce. It is not
disputed that this principle is applicable to donations (i.e. gifts) to
social welfare bodies for their own use or for charitable distribution.
However, if the social welfare bodies later sell goods donated
to them by Customs for charitable distribution, even to raise money for
charitable aims, the goods are not in fact disposed of outside the
channels of commerce but into the channels of commerce. If the
social welfare bodies charitably distribute goods donated to them by
Customs but the goods later find their way back into the channels of
commerce, this does not alter the fact that the goods were disposed of
outside the channels of commerce, in the ordinary sense of “disposal”.
Instead, the later sale of the distributed goods is relevant to the
assessment of whether the disposal outside the channels of commerce was
“in such a manner so as to avoid any harm caused to the right holder”.
Therefore, the Panel will consider the interpretation of that part of
the principle in further detail.
This principle, by its terms,
provides that authorities shall have the authority to order that the
goods “be disposed of”, in the passive voice. There is no obligation
that the relevant authorities carry out the disposal themselves but
rather they may entrust the actual disposal to another body. The
carrying out of disposal “outside the channels of commerce”
recognizes the opportunity for involvement of other bodies, such as
charities, or noncommercial use by government. The principle attaches to
the “manner” in which infringing goods are disposed of, not to the
actual disposal. Authorities are not held responsible for acts of the
bodies carrying out the disposal that is beyond the authorized manner.
Further, the principle is that the manner shall be “so as to” avoid
harm. This is phrased in terms of purpose, not result. The
responsibility of the authorities is to ensure that the manner in which
the goods are disposed of outside the channels of commerce is designed
in such a way that it will comply with the principle.”(259)
251.
The Panel in China — Intellectual Property Rights
addressed the specific requirement within this principle that the manner
of disposal shall “avoid” harm:
“The principle is that the manner
of disposal shall “avoid” harm. China argues that this is an
obligation to “pay due regard to”. However, the Panel notes that the
ordinary meaning of “avoid” can be defined as “keep off, prevent;
obviate”. Further, the principle is that the manner shall avoid “any”
harm caused to the right holder, not just “harm” or “some” harm.
Therefore, the manner of disposal must be designed in such a way as to
prevent any harm occurring to the right holder.
It must be recalled that disposal of
infringing goods outside the channels of commerce, in context, is an
alternative to destruction of the goods. In the Panel’s view, this
implies that any inherent risk of harm due simply to the fact that the
goods have not been completely destroyed is insufficient to disqualify a
disposal method, as it would nullify the choice between disposal and
destruction. However, more specific concerns linked to harm caused to
the right holder by a particular manner of disposal are relevant in
assessing conformity with the principle that disposal outside the
channels of commerce be “in such a manner as to avoid any harm caused
to the right holder”.
The Panel finds confirmation of this
interpretation within
Article 46. The fourth sentence of Article 46
expressly provides that simple removal of the trademark unlawfully
affixed is not sufficient to permit release of counterfeit trademark
goods into the channels of commerce other than in exceptional
cases. In contrast, the first sentence of Article 46
contains a more general requirement that the requisite authority to
order disposal of goods outside the channels of commerce shall be “in
such a manner as to avoid any harm caused to the right holder”. Whilst
this reflects, in part, the fact that the first sentence does not only
apply to counterfeit trademark goods, it also demonstrates that when
goods are disposed of outside the channels of commerce it is not
assumed that the removal of the trademark is required (or insufficient).
It remains possible that the
trademark unlawfully affixed may cause confusion, depending on the
circumstances in which goods are disposed of outside the channels of
commerce. Practical requirements, such as removal of the trademark,
affixation of a charitable endorsement or controls over the use of goods
or distribution methods, may avoid confusion. The cooperation of the
right holder would be valuable in this regard but the terms of the
Article do not indicate that that is a requirement. However, the issue
of harm to the right holder, whether to its reputation or through lost
sales, through disposal of goods outside the channels of commerce
without removal of the trademark unlawfully affixed depends on the
circumstances. Otherwise, any disposal outside the channels of commerce
where persons could simply observe a counterfeit trademark would be
presumed to cause harm to the right holder. This result is not
contemplated by the terms of Article
46, as the possibility of observing the counterfeit trademark is
incidental to the requisite authority not to destroy the goods.”(260)
252.
The Panel in China — Intellectual Property Rights
examined a claim with respect to customs measures from China that
contained certain optional disposition methods of infringing goods
besides destruction (i.e. donation to social welfare bodies, sale to the
right holder and auction). The claim was that, under such measures,
competent authorities lacked authority to order disposal of such
infringing goods in accordance with the principles of the first sentence
of Article 46 as incorporated in Article
59. With respect to these three optional disposition methods, the
Panel concluded, respectively, that the complainant had not established
that Chinese Customs lacked such authority in accordance with the
principles of Article
46.(261)
253.
With respect to auction, the Panel in China — Intellectual Property
Rights was confronted with the complainant’s claim that, under
the measures at issue, this deposition method was mandatory, in effect
precluding the authority to order destruction of the infringing goods in
violation of the principles set out in the first sentence of
Article 46. The Panel began with the following considerations:
“The Panel will now consider
Customs’ authority to order that infringing goods be auctioned.
Auction is the third disposal method set out in the measures at issue.
Auction is not a form of destruction, and it is undisputed that auction
is not a form of disposal outside the channels of commerce.
Accordingly, this disposal method is clearly not
required by Article 59. However, the Panel
recalls its finding … that the remedies specified in Article 59 are
not exhaustive. Therefore, the fact that authority to order auction of
infringing goods is not required is not in itself inconsistent with Article
59.
The United States claims that,
because the auction method is allegedly mandatory, it deprives Customs
of the authority to order destruction of infringing goods at a certain
point within the purview of
Article 59. It does not allege that Customs has authority to order
donation to social welfare bodies (or sale to the right holder) in
circumstances where Customs is considering auction. In these
circumstances, it is assumed that Customs has already decided against
those other methods. The issue is only whether the authority to order
auction precludes authority to order destruction of infringing
goods.”(262)
254.
Then, after reviewing the language of the measures before it, the Panel
first found that the complainant had not “established that the Customs
measures on their face oblige Customs to order the auction of infringing
goods.”(263) The
Panel then turned to the evidence before it in order to confirm such
finding:
“It is apparent that the number of
shipments destroyed far exceeds the number of shipments auctioned, and
that in three years Customs has only decided to auction goods twelve
times. In fact, no infringing goods destined for importation have ever
been auctioned under the measures at issue during the period for which
statistics are available. Customs evidently has little, if any,
difficulty in choosing to destroy goods, which is consistent with the
view that it has wide authority to do so.
The Panel notes that there is a small number of cases where Customs
has ordered the auction of goods. However, the small number of cases of
auction does not indicate whether this was pursuant to a choice not to
destroy the goods, or whether Customs considered that it lacked the
authority to destroy the goods. The Panel reiterates that the pertinent
issue is whether Customs was permitted by law to order
destruction in those cases. The United States agrees that a Member may choose
between destruction and auction in its discretion provided that it has
unconditional power to order destruction in all circumstances.
The very low rate of auctions is
consistent with the view that auctions are not mandatory. It could be
consistent with the view that the auction method is mandatory if there
were some indication that the infringing features cannot be eradicated
from an exceedingly large number and proportion of goods confiscated by
Customs. However, in the absence of such evidence, and in light of the
other evidence discussed above, the Panel does not accept that view.”(264)
255.
Finally, with the above considerations in mind, the Panel found that the
complainant had not “established that the authority to order auction
of infringing goods under the Customs measures precludes authority to
order destruction of infringing goods in accordance with the principles
set out in the first sentence of Article
46.”(265)
(c) Principle in
the fourth sentence of Article 46: “simple removal of the trademark
unlawfully affixed”
256.
In China — Intellectual Property Rights, the Panel examined a
claim with respect to the authority given by the measures at issue to
release infringing goods into the channels of commerce by auctioning
them. The claim was that such authority did not comply with the
principle in the fourth sentence of Article 46,
as incorporated in
Article 59, which states:
“In regard to counterfeit trademark
goods, the simple removal of the trademark unlawfully affixed shall not
be sufficient, other than in exceptional cases, to permit release of the
goods into the channels of commerce.”
257.
The Panel first considered that even if under the measures auction was
not a mandatory disposition method, and even if auction has never been
used in practice with respect to imports, it could still be scrutinized,
“as such”, under the principle in the fourth sentence of Article 46:
“The Panel recalls its finding … that the obligation in
Article
59 applies both to mandatory and discretionary measures as the
obligation that Members’ competent authorities “shall have the
authority” to make particular orders attaches to what the authorities
are permitted by law to order, not only to what they must
order. This finding applies a fortiori to the principle in the
fourth sentence of Article 46 as only
discretionary authority to order release of goods into the channels of
commerce will not preclude the authority required by the first sentence
of Article 46 at some point. The principle in
the fourth sentence of Article 46 regarding
authority to order the release of goods into the channels of commerce,
as an alternative to destruction or disposal outside the channels of
commerce, could be redundant if it did not apply to discretionary
measures.(266)
Therefore, the fact that authority to release goods into the channels of
commerce is not mandatory does not shield such a disposition method from
a Panel’s assessment of its conformity “as such” with Article 59
of the TRIPS Agreement, as it incorporates the principle in the
fourth sentence of Article 46.
This particular case also presents a
specific set of circumstances. The nature of the measures at issue is
such that, even if they do not mandate auction (and do not preclude
authority to order destruction) the elimination of the infringing
features is mandatory in every case where Customs chooses to
auction infringing goods (as discussed below). If the elimination of the
infringing features constitutes simple removal of the trademark, it will
be inconsistent with the principle in the fourth sentence of Article 46,
as incorporated by
Article 59, in all cases where Customs orders
auction of infringing goods. Although Customs has never auctioned goods
destined for importation, this may be due only to the smaller volume of
infringing goods destined for importation rather than exportation. China
does not assert that Customs might auction goods destined for
importation in future but defends its auction method based on its own
good faith interpretation of the requirements of
Article 59 of the TRIPS Agreement and of the fourth sentence of Article
46. Indeed, China advises the Panel that auction, whether of exports
or imports, is a “preferred” disposition method in certain
circumstances and it vigorously defends its right to use it, albeit
sparingly. Therefore, the Panel’s rulings on the applicability of the
fourth sentence of Article 46, as incorporated
in
Article 59, of the TRIPS Agreement and the
conformity of China’s auction method with that provision will, to the
extent that the obligation is applicable, prevent China ex ante
from engaging in certain conduct inconsistent with its obligations under
a covered agreement, which is precisely the purpose of an “as such”
claim.”(267)
258.
The Panel then observed that, under the measures, the only action taken
before the auction was the removal of the trademark from infringing
goods. The Panel found that because such action constituted a “simple
removal of a trademark” it was not consistent with the principle of
the first sentence of Article 46.
“The Panel notes that the word “simple”
can be defined as “with nothing added; unqualified; neither more nor
less than; mere, pure”. A situation in which a trademark is removed
from a good and no other action is taken will constitute “simple”
removal of the trademark. Therefore, the Panel’s preliminary view is
that eradication of the infringing features under the measures at issue
constitutes “simple” removal of the trademark as contemplated by the
fourth sentence of
Article 46, as incorporated by Article 59.”(268)
259.
In the Panel’s view the fact that the measures provide for the right
holders to be consulted and that the confiscated goods are subject to
“reserved prices” are irrelevant to its finding that the measures
provide for a simple removal of the trademark:
“Turning to the measures at issue,
the Panel observes that the procedure for seeking comment by right
holders does not affect the state of the goods, nor is there any
obligation to take right holder’s comments into account. Therefore, it
is irrelevant to the question whether the measures at issue provide for
“simple removal of the trademark unlawfully affixed”.
China alleges that auctions of goods confiscated by Customs are
subject to a reserve price that ensures that infringers do not have the
opportunity to purchase the seized goods at an unreasonably low cost and
reaffix counterfeit marks.
The Panel does not agree. As China
itself stated in its rebuttal submission, “the very principle of
trademark protection is that a trademark distinguishes a good and allows
for a significant market premium”. The Panel points out that a
counterfeit trademark is designed to obtain some or all of that economic
premium. When the counterfeit trademark is removed, the value of the
good is diminished and is less than its market value if it is resold
with a counterfeit trademark reaffixed. In other words, it remains
economically viable for the importer or a third party to purchase the
goods at auction and reaffix the trademarks in order to infringe again,
with the heightened risk of this occurring discussed … above. In any
case, there is no evidence that the prices established by the method
used by China Customs are so high that it is no longer economically
viable to purchase the goods and reaffix the trademarks.”(269)
260.
In making the above findings, the Panel also made various observations
on the meaning and objective of the term “simple removal of the
trademark”:
“Viewed in light of the objective,
the “simple” removal of the trademark is principally a reference to
the fact that the state of the goods is not altered in any other way so
that the absence of the trademark is not an effective deterrent to
further infringement. Removal of the trademark is not “simple” if
the state of the goods is altered sufficiently to deter further
infringement.
…
The Panel notes that the fourth
sentence of
Article 46, by its specific terms, is not
limited to an action to render goods non-infringing, which the simple
removal of the trademark would achieve. Rather, the fourth sentence of Article 46
imposes an additional requirement beyond rendering the goods
non-infringing in order to deter further acts of infringement with those
goods. Therefore, it is insufficient, other than in exceptional cases,
to show that goods that have already been found to be counterfeit are
later unmarked. The release into the channels of commerce of such goods,
while they may no longer infringe upon the exclusive rights in Article 16 of the TRIPS
Agreement, will not comply with the requirement in the fourth
sentence of Article 46, as incorporated by Article
59.”(270)
261.
Finally, the Panel considered that the “simple” removal of trademark
under the measures at issue did not fall under the category of “exceptional
cases” of simple removals permitted under the fourth sentence of Article 46,
as incorporated in Article
59. As to the scope of this exception, the Panel stated:
“The Panel notes that the phrase
“other than in exceptional cases”, read in context, refers to a
subset of the cases covered by the fourth sentence of Article 46,
as incorporated by Article
59, namely, those cases in which a Member’s competent border
authorities permit the release of goods that have been found to be
counterfeit trademark goods into the channels of commerce.”(271)
262.
The Panel then considered the question of how to determine when
any such case may be considered “exceptional”:
“The Panel considers that the
phrase “other than in exceptional cases”, like the rest of the
principle set out in the fourth sentence of Article 46,
must be interpreted in light of the objective of that Article, namely,
“to create an effective deterrent to infringement”. There may well
be cases in which the simple removal of the trademark prior to release
of the goods into the channels of commerce would not lead to further
infringement. For example, an innocent importer who has been deceived
into buying a shipment of counterfeit goods, who has no means of
recourse against the exporter and who has no means of reaffixing
counterfeit trademarks to the goods, might constitute such a case.
However, such cases must be narrowly circumscribed in order to satisfy
the description of “exceptional”. Even when narrowly circumscribed,
application of the relevant provision must be rare, lest the so-called
exception become the rule, or at least ordinary.
The Panel does not consider that “exceptional
cases” for the purposes of the fourth sentence of Article 46
may simply be demonstrated by a low rate of cases in which simple
removal of the trademark is treated as sufficient to permit release of
goods into the channels of commerce. Firstly, “exceptional cases”
within the meaning of the fourth sentence of Article 46,
as incorporated in
Article 59, is not assessed in terms of a
proportion of all cases of infringing goods seized at the border.
Secondly, such an approach to goods that have already been found to be
counterfeit trademark goods would amount to a margin of tolerance of
further infringement that is not consistent with the objective of Article 46
of creating an effective deterrent.”(272)
LXI. Article
60
back to top
A. Text of
Article 60
Article 60: De Minimis Imports
Members may exclude from
the application of the above provisions small quantities of goods of a
noncommercial nature contained in travellers’ personal luggage or sent
in small consignments.
B. Interpretation and Application of Article 60
1. Relationship with
other articles
263.
With respect to the relationship with Article 61,
see the excerpt of the panel report referenced in paragraph 275
below.
LXII. Article
61
back to top
A. Text of
Article 61
Article 61
Members shall provide for criminal procedures and penalties to be
applied at least in cases of wilful trademark counterfeiting or
copyright piracy on a commercial scale. Remedies available shall include
imprisonment and/ or monetary fines sufficient to provide a deterrent,
consistently with the level of penalties applied for crimes of a
corresponding gravity. In appropriate cases, remedies available shall
also include the seizure, forfeiture and destruction of the infringing
goods and of any materials and implements the predominant use of which
has been in the commission of the offence. Members may provide for
criminal procedures and penalties to be applied in other cases of
infringement of intellectual property rights, in particular where they
are committed wilfully and on a commercial scale.
B. Interpretation and Application of Article 61
1. General
264.
In China — Intellectual Property Rights, the Panel considered
the overall nature and scope the provisions under Article
61. As to the nature of these provisions the Panel stated:
“In the Panel’s view, the general obligation
in
Article 41.1
confirms that Article 61 contains
obligations, as one of the specific provisions on enforcement procedures
in Part III.”(273)
265.
The Panel in China — Intellectual Property Rights, then made
the following general statement with respect to the scope of
Article 61:
“Therefore, the standard of compliance with Article 61
is the minimum internationally agreed standard set out in that Article.
The minimum standard in Article 61 does not
defer to China’s domestic practice on the definition of criminal
liability and sanctions for other wrongful acts in areas not subject to
international obligations under the TRIPS Agreement, unless it so
states. For example, the second sentence refers to “crimes of a
corresponding gravity” which might refer to domestic practice in other
areas. However, the first
sentence of Article 61 does not make any such
reference.
…
Part III of the TRIPS Agreement distinguishes
between the treatment of wilful trademark counterfeiting and copyright
piracy on a commercial scale, on the one hand, and all other
infringements of intellectual property rights, on the other hand, in
that only the former are subject to an obligation regarding criminal
procedures and penalties. This indicates the shared view of the
negotiators that the former are the most blatant and egregious acts of
infringement. This view must inform the interpretation of Article 61.”(274)
266.
The Panel in China — Intellectual Property Rights also
clarified that Article 61 does not address
issues of “evidence” or “proceedings”:
“In any event, the Panel considers that the
United States’ allegation regarding physical evidence relates to the
evidence sufficient to initiate a criminal prosecution more than to the
definition of the crime itself. Article 61 of the TRIPS Agreement
does not address evidence. The first sentence of Article 61
addresses the infringing activity in respect of which the minimum
standards must apply. Evidence, including in criminal procedures, is
mentioned in
Article 41.3, but that provision has no bearing on this claim.
Section 5 of Part III of the TRIPS Agreement, on
criminal procedures, can be contrasted with Section 2, on civil and
administrative procedures and remedies, which makes mention of evidence
in Article 42 and contains a dedicated
provision addressing certain specific issues regarding evidence in Article 43.
Even Article 43 does not address the detailed
issue of sufficiency of evidence. Rather, Section 2 leaves such
questions to the judicial authorities who weigh that issue in the
exercise of their authority to order the remedies set out in Articles 44
to 46. Given the brevity of Section 5, which
devotes two sentences to acts of infringement and two sentences to
remedies (or penalties), it would be surprising if it was intended to
create a broader obligation addressing issues of evidence and procedure.
The terms used in Article
61 do not suggest that it was so intended. The different phrasing
of the obligation to ‘provide … to be applied’ in the first
sentence does not have a bearing on this issue.”(275)
2. The first sentence
of Article 61
(a) General
267. The Panel in China
— Intellectual Property Rights made various clarifications with
respect to the scope of the first sentence of Article 61.
The Panel first made the following general statement:
“The terms of the obligation in the first
sentence of
Article 61 of
the TRIPS Agreement are that Members shall “provide for criminal
procedures and penalties to be applied”. That obligation applies to
“wilful trademark counterfeiting or copyright piracy on a commercial
scale”. Within that scope, there are no exceptions. The obligation
applies to all acts of wilful trademark counterfeiting or
copyright piracy on a commercial scale.”(276)
268.
The Panel in China — Intellectual Property Rights then
clarified that the first sentence of Article 61
contains no fewer than four limitations on the obligation that it sets
forth and that these limitations define the scope of the relevant
obligation and are not exceptions:(277)
“The first limitation is that the obligation
applies to trademarks and copyright rather than to all intellectual
property rights covered by the TRIPS Agreement. The fourth sentence of Article 61
gives Members the option to criminalize other infringements of
intellectual property rights, in particular where they are committed
wilfully and on a commercial scale. Despite the potential gravity of
such infringements,
Article 61 creates no obligation to criminalize them… .
The second limitation in the first sentence of Article
61, which is
related to the first, is that it applies to counterfeiting and piracy
rather than to all infringements of trademarks and copyright… . This
limitation, like the first, indicates an intention to reduce the scope
of the obligation… .
…
The third limitation in the first sentence of Article 61
is indicated by the word “wilful” that precedes the words “trademark
counterfeiting or copyright piracy”. This word functions as a
qualifier indicating that trademark counterfeiting or copyright piracy
is not subject to the obligation in the first sentence of Article 61
unless it is “wilful”. This word, focussing on the infringer’s
intent, reflects the criminal nature of the enforcement procedures at
issue. It is absent from Section 4 of Part III, even though that Section
is similarly limited, as a minimum, to counterfeit trademark goods and
pirated copyright goods. The penalties for criminal acts, such as
imprisonment, fines and forfeiture of property, are relatively grave, as
reflected in the second sentence of Article 61.
There is no obligation to make such penalties available with respect to
acts of infringement committed without the requisite intent.
The fourth limitation in the first sentence of Article 61
is indicated by the phrase “on a commercial scale” that follows the
words “trademark counterfeiting or copyright piracy”. This phrase,
like the word “wilful”, appears to qualify both “trademark
counterfeiting” and “copyright piracy”. The limitation to cases on
a commercial scale, like the limitation to cases of wilfulness, stands
in contrast to all other specific obligations on enforcement in Part III
of the TRIPS Agreement.”(278)
269.
Bearing the above limitations in mind, the Panel in China —
Intellectual Property Rights reached the following conclusions with
respect to the scope of the phrase “wilful trademark counterfeiting or
copyright piracy on a commercial scale”:
“The principal interpretative point in dispute
is the meaning of the phrase “on a commercial scale”. This phrase
functions in context as a qualifier, indicating that wilful trademark
counterfeiting or copyright piracy is included in the scope of the
obligation provided that it also satisfies the condition of being “on
a commercial scale”. Accordingly, certain acts of wilful trademark
counterfeiting or copyright piracy are excluded from the scope of the
first sentence of
Article 61.
Despite the fact that trademark counterfeiting and
copyright piracy infringe the rights of right holders, and despite the
fact that they can be grave, the two qualifications of wilfulness and
“on a commercial scale” indicate that Article 61
does not require Members to provide for criminal procedures and
penalties to be applied to such counterfeiting and piracy per se
unless they satisfy certain additional criteria. This is highlighted by
the fourth sentence of
Article 61, which allows Members to provide for criminal procedures
and penalties to be applied in other cases of infringement, ‘in
particular’ where they are committed wilfully and on a commercial
scale. This indicates that the negotiators considered cases of wilful
infringement on a commercial scale to represent a subset of cases of
infringement, comprising the graver cases. This is useful context for
interpreting the first sentence of Article 61,
even though it does not refer to “infringement” in general, because
the first sentence refers to both “counterfeiting” and “piracy”
and wilfulness and commercial scale, evidently to limit the cases of
infringement in different ways. Therefore, the text of
Article 61 indicates that it must not be assumed that the nature of
counterfeiting and piracy per se is such that Members are
obliged to provide for the application of criminal procedures
and penalties.”(279)
(b) “trademark
counterfeiting or copyright piracy”
270.
The Panel in China — Intellectual Property Rights
clarified the meaning of the terms “trademark counterfeiting” and
“copyright piracy” in Article 61 by
comparing them with the similar terms “counterfeit trademark goods”
and “pirated copyright goods” which are defined in footnote 14
to Article
51:
“The terms “trademark counterfeiting” and
“copyright piracy” are not defined in the TRIPS Agreement. They are
distinct from the concepts of “trademark infringement” and “copyright
infringement”. They are similar to the terms “counterfeit trademark
goods” and “pirated copyright goods” which are defined for the
purposes of the TRIPS Agreement(280)
in footnote 14 …
…
The terms used in the first sentence of Article 61
denote classes of acts or activity whilst the terms used in footnote 14
denote classes of goods only. This reflects the fact that Article 61
provides for criminal enforcement against infringing acts whilst Section
4 of Part III (in which the terms defined in footnote 14
are used) provides for enforcement at the border against infringing
goods. The definitions in
footnote 14 also refer to the law of the country of ‘importation’
whilst Article 61 relates to the law of the
Member to which the obligation applies — generally speaking, the law
of the Member where the infringing act occurs. Subject to these
observations, the Panel considers that the definitions in footnote 14
are relevant in understanding the terms used in Article 61.”(281)
(c) “on a
commercial scale”
271.
In China — Intellectual Property Rights, based on the evidence
of presented to it, the Panel clarified the meaning of the term “on a
commercial scale” in Article 51 as follows:
“[A] “commercial scale” is the magnitude or
extent of typical or usual commercial activity. Therefore,
counterfeiting or piracy “on a commercial scale” refers to
counterfeiting or piracy carried on at the magnitude or extent of
typical or usual commercial activity with respect to a given product in
a given market. The magnitude or extent of typical or usual commercial
activity with respect to a given product in a given market forms a
benchmark by which to assess the obligation in the first sentence of Article 61.
It follows that what constitutes a commercial scale for counterfeiting
or piracy of a particular product in a particular market will depend on
the magnitude or extent that is typical or usual with respect to such a
product in such a market, which may be small or large. The magnitude or
extent of typical or usual commercial activity relates, in the longer
term, to profitability.(282)
The Panel observes that what is typical or usual
in commerce is a flexible concept. The immediate context in the second
sentence of Article 61, which is closely related to the first, refers to
the similarly flexible concepts of “deterrent” and “corresponding
gravity”. Neither these terms nor “commercial scale” are precise
but all depend on circumstances, which vary according to the differing
forms of commerce and of counterfeiting and piracy to which these
obligations apply.”(283)
272.
The Panel in China — Intellectual Property Rights
stated that the terms in first sentence of Article
61, in particular the term “commercial” within “on a
commercial scale”, is “technology-neutral” and it hence applies to
various forms of commerce and means of infringement:
“The Panel emphasizes that the terms used in the
first sentence of
Article 61, in particular ‘commercial’, are technology-neutral.
A “commercial scale” can apply to various forms of commerce and,
hence, various means of infringement. The specific forms of commerce are
not static but adapt to changing forms of competition due to
technological development and the evolution of marketing practices. The
Panel sees no reason why those forms of commerce should be limited to
the forms of commerce that existed at the time of negotiation of the
TRIPS Agreement. Accordingly, the application of the term ‘commercial
scale’ can adjust to different situations, and refer to a different
relative magnitude or extent, degree or proportion, depending on the
facts.(284)
However, subsequent technological developments do not alter the
considerations relevant to the interpretation of the terms used in
Article 61.”(285)
273.
The Panel in China — Intellectual Property Rights made the
following clarifications with respect to the burden of proving that the
method used by a Member to implement the provision of “on a commercial
scale” is not consistent with Article
61:
“The Panel notes that it is the standard in the
treaty obligation that varies as applied to different fact situations,
and not necessarily the means by which Members choose to implement that
standard… .
[The third sentence of Article 1.1 of the TRIPS
Agreement] confirms that the TRIPS Agreement does not mandate
specific forms of legislation. The Panel may not simply assume that a
Member must give its authorities wide discretion to determine what is on
a commercial scale in any given case, and may not simply assume that
thresholds, including numerical tests, are inconsistent with the
relative benchmark in the first sentence of Article 61 of the TRIPS
Agreement. As long as a Member in fact provides for criminal procedures
and penalties to be applied in cases of wilful trademark counterfeiting
or copyright piracy on a commercial scale, it will comply with this
obligation. If it is alleged that a Member’s method of implementation
does not so provide in such cases, that allegation must be proven with
evidence. Therefore, the Panel will assess whether the evidence shows
that China fails to provide for criminal procedures and penalties to be
applied in any such cases.”(286)
274.
The Panel in China — Intellectual Property Rights also
clarified that the assessment of whether a measure conforms with the
relative standard of Article 61 has to be
made in respect to the market of the Member whose measure is being
assessed:
“The Panel needs to consider the specific
conditions applying in China’s marketplace in assessing whether the
measures in question, which exclude certain acts of infringement from
particular liability, conform to the relative standard in Article 61.
This applies a fortiori
as the relative standard is set in terms of what is “on a commercial
scale”, which varies not only by market but also by product within the
same market.”(287)
3. Relationship with
other Articles
275. The Panel in China
— Intellectual Property Rights
addressed the language of Article 60 to
reject the view that “on a commercial scale” in Article 61
is a de minimis provision:
“As to the view that “on a commercial scale”
is basically a de
minimis provision, the Panel need look no further than the
preceding provision, Article 60, to see how
the negotiators addressed that issue.
Article 60 forms part of Section 4 on special requirements related
to border measures and serves an analogous purpose to the phrase “on a
commercial scale” in Article 61 in that
both define the lower end of infringement at which a particular type of
enforcement procedure must be available. However, the terms of each are
quite different: Article 60
defines de minimis infringement in terms of volume (“small
quantities”), nature (“of a non-commercial nature”) and
circumstances (“in travellers” personal luggage or sent in small
consignments’). Had the negotiators wanted to exclude only de
minimis infringement from the minimum standard of Article
61, they had a model in Article 60, or
they could have used words such as ‘except for minor or personal use’.
However, they did not. Instead, Article 61
refers to size (“scale”) qualified only by the word “commercial”.
This indicates that the negotiators intended something different from de
minimis. Article 60 also indicates that
the negotiators did not equate small with noncommercial, confirming that
a “commercial” scale is not necessarily small-scale nor large-scale.”(288)
LXIII. Article
62
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A. Text of
Article 62
Article 62
1.
Members may require, as a condition of the acquisition or maintenance of
the intellectual property rights provided for under Sections 2 through 6
of Part II, compliance with reasonable procedures and formalities. Such
procedures and formalities shall be consistent with the provisions of
this Agreement.
2.
Where the acquisition of an intellectual property right is subject to
the right being granted or registered, Members shall ensure that the
procedures for grant or registration, subject to compliance with the
substantive conditions for acquisition of the right, permit the granting
or registration of the right within a reasonable period of time so as to
avoid unwarranted curtailment of the period of protection.
3.
Article 4 of the Paris Convention (1967)
shall apply mutatis
mutandis to service marks.
4.
Procedures concerning the acquisition or maintenance of intellectual
property rights and, where a Member’s law provides for such
procedures, administrative revocation and inter partes
procedures such as opposition, revocation and cancellation, shall be
governed by the general principles set out in paragraphs 2
and
3 of
Article 41.
5.
Final administrative decisions in any of the procedures referred to
under paragraph 4 shall be subject to
review by a judicial or quasi-judicial authority. However, there shall
be no obligation to provide an opportunity for such review of decisions
in cases of unsuccessful opposition or administrative revocation,
provided that the grounds for such procedures can be the subject of
invalidation procedures.
B. Interpretation and Application of Article 62
1. Article 62.2
276.
In Canada — Patent Term, Canada argued that Article
33, a provision calling for a minimum patent protection period, must
be read in conjunction with Article 62.2,
which recognizes the fact that the length of the patent-granting process
invariably involves some curtailment of the period of protection. From
the interplay of these two provisions, Canada argued that Article 33
embodies a notion of “effective” protection and that Article 33
can be complied with by making available a nominally shorter period of
protection, while taking into consideration “effective” protection
during the period of the patent approval proceedings.(289)
The Appellate Body upheld the Panel’s rejection of this argument:
“Article 62.2 deals
with procedures relating to the acquisition of intellectual property
rights. Article 62.2 does not deal with the
duration of those rights once they are acquired. Article 62.2
is of no relevance to this case. This purely procedural Article cannot
be used to modify the clear and substantive standard set out in Article 33
so as to conjecture a new standard of ‘effective’ protection. Each
Member of the WTO may well have its own subjective judgement about what
constitutes a ‘reasonable period of time’ not only for granting
patents in general, but also for granting patents in specific sectors or
fields of complexity. If Canada’s arguments were accepted, each and
every Member of the WTO would be free to adopt a term of ‘effective’
protection for patents that, in its judgement, meets the criteria of ‘reasonable
period of time’ and ‘unwarranted curtailment of the period of
protection’, and to claim that its term of protection is substantively
‘equivalent’ to the term of protection envisaged by Article
33. Obviously, this cannot be what the Members of the WTO envisaged
in concluding the TRIPS Agreement. Our task is to interpret the covered
agreements harmoniously. A harmonious interpretation of Article 33
and
Article 62.2 must regard these two treaty provisions as distinct
and separate Articles containing obligations that must be fulfilled
distinctly and separately.”(290)
277.
With respect to the relationship of Article 62.2
with Articles 1.1 and 33,
see
paragraph 8 above.
2. Article 62.4
278.
In EC — Trademarks and Geographical Indications (Australia)
the Panel rejected claims concerning procedures for objections to GI
registration because the claims had been brought under provisions in
Part III rather than Article 62.4:
“Australia’s claims concern an inter partes
procedure permitting objections which is related to the acquisition of
intellectual property rights under the Regulation. As such, it is
covered by Part IV of the TRIPS Agreement, not Part III. The general
principles in Article 41.2 and 41.3
apply to such inter partes
procedures, where a Member’s law provides for them, by virtue of
Article 62.4 of the TRIPS Agreement. However, Article 62.4
is outside the Panel’s terms of reference. Accordingly, the Panel
rejects these claims.”(291)
LXIV. Article
63
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A. Text of
Article 63
Article 63: Transparency
1.
Laws and regulations, and final judicial decisions and administrative
rulings of general application, made effective by a Member pertaining to
the subject matter of this Agreement (the availability, scope,
acquisition, enforcement and prevention of the abuse of intellectual
property rights) shall be published, or where such publication is not
practicable made publicly available, in a national language, in such a
manner as to enable governments and right holders to become acquainted
with them. Agreements concerning the subject matter of this Agreement
which are in force between the government or a governmental agency of a
Member and the government or a governmental agency of another Member
shall also be published.
2.
Members shall notify the laws and regulations referred to in
paragraph 1 to the Council for TRIPS in order to assist that
Council in its review of the operation of this Agreement. The Council
shall attempt to minimize the burden on Members in carrying out this
obligation and may decide to waive the obligation to notify such laws
and regulations directly to the Council if consultations with WIPO on
the establishment of a common register containing these laws and
regulations are successful. The Council shall also consider in this
connection any action required regarding notifications pursuant to the
obligations under this Agreement stemming from the provisions of Article 6ter
of the Paris Convention (1967).
3.
Each Member shall be prepared to supply, in response to a written
request from another Member, information of the sort referred to in
paragraph 1. A Member, having reason to believe that a specific
judicial decision or administrative ruling or bilateral agreement in the
area of intellectual property rights affects its rights under this
Agreement, may also request in writing to be given access to or be
informed in sufficient detail of such specific judicial decisions or
administrative rulings or bilateral agreements.
4.
Nothing in paragraphs 1, 2
and
3 shall require Members to disclose
confidential information which would impede law enforcement or otherwise
be contrary to the public interest or would prejudice the legitimate
commercial interests of particular enterprises, public or private.
B. Interpretation and Application of Article 63
1. Article 63.2
(a) Notification
requirements
279.
At its meeting of 21 November 1995, the Council for TRIPS adopted
Decisions on the rules of procedure for notification under
Article 63.2,(292)
including a possible format for listing of “Other Laws and Regulations”(293)
and a Checklist of Issues on Enforcement.(294)
280.
Article 2 of the Agreement between
the World Intellectual Property Organization and the World Trade
Organization contains provisions relevant to notifications and
translation of laws and regulations under Article 63.2.(295)
LXV. Article
64
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A. Text of
Article 64
Article 64: Dispute Settlement
1.
The provisions of Articles XXII
and
XXIII of GATT 1994 as
elaborated and applied by the Dispute Settlement Understanding shall
apply to consultations and the settlement of disputes under this
Agreement except as otherwise specifically provided herein.
2.
Subparagraphs 1(b) and 1(c) of Article XXIII of GATT 1994
shall not apply to the settlement of disputes under this Agreement for a
period of five years from the date of entry into force of the WTO
Agreement.
3.
During the time period referred to in paragraph
2, the Council for TRIPS shall examine the scope and modalities for
complaints of the type provided for under subparagraphs 1 (b)
and
1(c) of Article XXIII of GATT
1994 made pursuant to this Agreement, and submit its
recommendations to the Ministerial Conference for approval. Any decision
of the Ministerial Conference to approve such recommendations or to
extend the period in
paragraph 2 shall be made only by consensus, and approved
recommendations shall be effective for all Members without further
formal acceptance process.
B. Interpretation and Application of Article 64
1. Articles of the
TRIPS Agreement invoked in panel and Appellate Body proceedings
281.
For a table of disputes under the TRIPS Agreement, see the table of “Articles
of the Covered Agreements Invoked in Panel and Appellate Body
Proceedings” in the Chapter on the DSU.
2. Article 64.2 and
64.3
282.
On 14 November 2001, the Ministerial Conference adopted a Decision on
Implementation-Related Issues and Concerns, which includes a moratorium
for so-called “non-violation” and “situation” complaints under
the TRIPS Agreement. Paragraph 11.1
of the Decision reads as follows:
“The TRIPS Council is directed to continue its
examination of the scope and modalities for complaints of the types
provided for under
subparagraphs 1(b) and 1(c) of Article XXIII of GATT 1994
and make recommendations to the Fifth Session of the Ministerial
Conference. It is agreed that, in the meantime, Members will not
initiate such complaints under the TRIPS Agreement.”(296)
283.
On 1 August 2004, the General Council adopted a decision on “Doha Work
Programme”. Its paragraph 1. h on “Other elements of the Work
Programme” provides inter alia that “the moratori[um]
covered by paragraph 11.1
of the Doha Ministerial Decision on Implementation-related Issues and
Concerns … [is] extended up to the Sixth Ministerial Conference”.(297)
284.
On 18 December 2005, the Ministerial Conference adopted a Ministerial
Declaration on the “Doha Work Programme”. Paragraph 45 of the
Declaration, entitled “TRIPS non-violation and situation complaints”
reads as follows:
“We take note of the work done by the Council
for Trade-Related Aspects of Intellectual Property Rights pursuant to paragraph 11.1
of the Doha Decision on Implementation-Related Issues and Concerns and
paragraph 1.h of the Decision adopted by the General Council on 1 August
2004, and direct it to continue its examination of the scope and
modalities for complaints of the types provided for under subparagraphs
1(b) and 1(c) of Article XXIII of GATT 1994
and make recommendations to our next Session. It is agreed that, in the
meantime, Members will not initiate such complaints under the TRIPS
Agreement.”(298)
285.
Paragraph 10 of the General Council decision on “Implementation of Paragraph 6
of the Doha Declaration on the TRIPS Agreement and Public Health”,
adopted on 30 August 2003, provides that “Members shall not challenge
any measures taken in conformity with the provisions of the waivers
contained in this Decision under subparagraphs 1(b)
and
1(c) of
Article XXIII of GATT 1994”. On 6 December 2005, the General
Council adopted a decision on “Amendment of the TRIPS Agreement”.
Paragraph 4 of a new Article 31bis to be inserted into the TRIPS
Agreement provides that “Members shall not challenge any measures
taken in conformity with the provisions of this Article and the Annex to
this Agreement under subparagraphs 1(b)
and
1(c) of Article XXIII of GATT
1994”. For more information on these decisions, please see paragraphs
192–195 above.(299)
286.
In a Decision of 2 December 2009, the Ministerial Conference extended
the moratorium to its next meeting (to be held in December 2011):
“We take note of the work done by the Council
for Trade-Related Aspects of Intellectual Property Rights pursuant to paragraph 11.1
of the Doha Decision on Implementation-Related Issues and Concerns and
paragraph 45 of the Hong Kong Ministerial Declaration, and direct it to
continue its examination of the scope and modalities for complaints of
the types provided for under subparagraphs 1(b)
and
1(c) of Article
XXIII of GATT 1994 and make recommendations to our next Session,
which we have decided to hold in 2011. It is agreed that, in the
meantime, Members will not initiate such complaints under the TRIPS
Agreement.”(300)
LXVI. Article
65
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A. Text of
Article 65
Article 65: Transitional Arrangements
1.
Subject to the provisions of
paragraphs 2, 3
and
4, no Member shall be obliged to apply the
provisions of this Agreement before the expiry of a general period of
one year following the date of entry into force of the WTO Agreement.
2.
A developing country Member is entitled to delay for a further period of
four years the date of application, as defined in paragraph
1, of the provisions of this Agreement other than Articles
3, 4 and 5.
3.
Any other Member which is in the process of transformation from a
centrally-planned into a market, free-enterprise economy and which is
undertaking structural reform of its intellectual property system and
facing special problems in the preparation and implementation of
intellectual property laws and regulations, may also benefit from a
period of delay as foreseen in paragraph 2.
4.
To the extent that a developing country Member is obliged by this
Agreement to extend product patent protection to areas of technology not
so protectable in its territory on the general date of application of
this Agreement for that Member, as defined in paragraph
2, it may delay the application of the provisions on product patents
of Section 5 of
Part II to such areas of technology for an additional period of
five years.
5.
A Member availing itself of a transitional period under
paragraphs 1, 2, 3
or
4 shall ensure that any changes in its
laws, regulations and practice made during that period do not result in
a lesser degree of consistency with the provisions of this Agreement.
B. Interpretation and Application of Article 65
1. General
287.
In Canada — Patent Term, after upholding the Panel’s finding
that a term of protection available under the Canadian patent law was
shorter than required under Article
33, the Appellate Body distinguished the content of TRIPS
obligations from their temporal effect:
“In conclusion, we wish to point out that our
findings in this appeal have no effect whatsoever on the transitional
arrangements found in Part VI of the TRIPS Agreement.
The provisions in Part VI establish when obligations of the TRIPS
Agreement are to be applied by a WTO Member and not what those
obligations are. The issues raised in this appeal relate to what the
obligations are, not to when they apply.”(301)
2. Article 65.4
(a) “an
additional period of five years”
288.
In India — Patents (US), the Panel linked
Articles 27
and 65:
“Article 27
requires that patents be made available in all fields of technology,
subject to certain narrow exceptions. Article 65
provides for transitional periods for developing countries: in general
five years from the entry into force of the WTO Agreement, i.e. 1
January 2000, and an additional five years to provide for product
patents in areas of technology not so patentable as of 1 January 2000.
Thus, in such areas of technology, developing countries are not required
to provide product patent protection until 1 January 2005.”(302)
289.
In India — Patents (EC), the Panel emphasized that its findings
on the substance of the TRIPS obligations do not relate in any way to
the transition period:
“Since the matter has been addressed by India in
its arguments and caused some confusion in the previous case, we would
like to underline that the Panel’s findings do not in any way
foreshorten the transition period of until, at the latest, 1 January
2005 that India has for meeting its obligations under Articles 65.4
and
70.8(b) and (c).”(303)
3. Article 65.5
(a) “changes … do not result in a lesser degree of consistency”
290.
In Indonesia — Autos, the Panel examined the claim of the
United States that “Indonesia is in violation of its obligations under Article 65.5 of the TRIPS Agreement
because provisions of the National Car Programme which were introduced
by Indonesia during its transition period under the TRIPS Agreement put
special requirements on nationals of other WTO Members in respect of the
use of their trademarks which are inconsistent with the provisions of Article 20 of the TRIPS
Agreement”:
“The arguments put forward by the United States
in support of its claim [under Article 65.5]
are essentially the same as those that have been considered in
paragraphs 14.277 and 14.278 above [in relation to
Article 3, in conjunction with Article 20
on use of trademarks]. For the reasons set out in those paragraphs
above, [that these are not ‘requirements’ in the sense of Article 20]
we find that the United States has not demonstrated that measures have
been taken that reduce the degree of consistency with the provisions of Article 20
and which would therefore be in violation of Indonesia’s obligations
under Article 65.5 of the
TRIPS Agreement.”(304)
4. Relationship with
other Articles
291.
In Indonesia — Autos, the Panel noted that the transition
period under Article 65.2 does not apply to
Article 3:
“[W]e note that Indonesia has been under an
obligation to apply the provisions of Article 3
since 1 January 1996,
Article 3 not benefiting from
the additional four years of transition generally provided by
Article 65.2 to developing country Members.”(305)
292. The Panel in
India — Patents (US) made clear that
Article 70.8 is also one of the provisions of the TRIPS Agreement
to which the transition period of Article 65
does not apply:
“However, these transitional provisions [in Article
65] are not applicable to Article 70.8,
which ensures that, if product patent protection is not already
available for pharmaceutical and agricultural chemical product
inventions, a means must be in place as of 1 January 1995 which allows
for the entitlement to file patent applications for such inventions and
the allocation of filing and priority dates to them so that the novelty
of the inventions in question and the priority of the applications
claiming their protection can be preserved for the purposes of
determining their eligibility for protection by a patent at the time
that product patent protection will be available for these inventions,
i.e. at the latest after the expiry of the transitional period.” (306)
293.
Certain provisions of the TRIPS Agreement contain obligations contingent
upon the applicability of Article 65 (and
66). The Panel in India — Patents (US)
held with respect to Article
70.9:
“As is the case with Article
70.8(a), the granting of exclusive marketing rights is a special
obligation linked with the enjoyment by Members of the transitional
arrangements under Articles 65 and
66 of the Agreement.”(307)
LXVII. Article
66
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A. Text of
Article 66
Article 66: Least-Developed Country Members
1.
In view of the special needs and requirements of least-developed country
Members, their economic, financial and administrative constraints, and
their need for flexibility to create a viable technological base, such
Members shall not be required to apply the provisions of this Agreement,
other than Articles
3, 4 and 5,
for a period of 10 years from the date of application as defined under
paragraph 1 of Article 65. The Council for TRIPS shall, upon duly
motivated request by a least-developed country Member, accord extensions
of this period.
2.
Developed country Members shall provide incentives to enterprises and
institutions in their territories for the purpose of promoting and
encouraging technology transfer to least-developed country Members in
order to enable them to create a sound and viable technological base.
B. Interpretation and Application of Article 66
1. Article 66.1
(a) Extension of
transition period
294.
On 27 June 2002, the Council for TRIPS adopted a decision extending the
transition period under Article 66.1 for
least-developed country Members for certain obligations with respect to
pharmaceutical products, in the following terms:
“1.
Least-developed country Members will not be obliged, with respect to
pharmaceutical products, to implement or apply Sections 5
and
7 of Part II of the TRIPS Agreement or to enforce rights provided
for under these Sections until 1 January 2016.
2.
This decision is made without prejudice to the right of least-developed
country Members to seek other extensions of the period provided for in paragraph 1 of Article 66 of the TRIPS
Agreement.”(308)
295.
On 15 June 2005, the Council for TRIPS adopted a decision extending the
Maldives’ transition period under Article
66.1. The terms of the decision provide that “the Maldives shall
not be required to apply the provisions of the TRIPS Agreement, other
than Articles
3, 4
and 5, until 20 December 2007”.(309)
296.
On 29 November 2005, the Council for TRIPS adopted a decision extending
the transition period under Article 66.1
for least-developed country Members. The terms of the decision include inter alia
the following:
“1. Least-developed
country Members shall not be required to apply the provisions of the
Agreement, other than Articles
3, 4 and 5,
until 1 July 2013, or until such a date on which they cease to be a
least-developed country Member, whichever date is earlier.
…
5. Least-developed country
Members will ensure that any changes in their laws, regulations and
practice made during the additional transitional period do not result in
a lesser degree of consistency with the provisions of the TRIPS
Agreement.
6. This Decision is
without prejudice to the Decision of the Council for TRIPS of 27 June
2002 on “Extension of the Transition Period under
Article 66.1 of the TRIPS Agreement for Least-Developed Country
Members for Certain Obligations with respect to Pharmaceutical Products”
(IP/C/25), and to the right of least-developed country Members to seek
further extensions of the period provided for in paragraph 1 of Article
66 of the Agreement.”(310)
(b) Relationship
with other Articles
297.
With respect to the relationship of
Article 66.1 with Article
70.8(a) and 70.9, see paragraphs 292–293
above.
2. Article 66.2
298.
On 19 February 2003, the Council for TRIPS adopted a decision
establishing arrangements for the submission by developed country
Members of annual reports on their implementation of Article 66.2
and their annual review by the Council for TRIPS.(311)
LXVIII. Article
67
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A. Text of
Article 67
Article 67: Technical Cooperation
In order to facilitate the implementation of this Agreement,
developed country Members shall provide, on request and on mutually
agreed terms and conditions, technical and financial cooperation in
favour of developing and least-developed country Members. Such
cooperation shall include assistance in the preparation of laws and
regulations on the protection and enforcement of intellectual property
rights as well as on the prevention of their abuse, and shall include
support regarding the establishment or reinforcement of domestic offices
and agencies relevant to these matters, including the training of
personnel.
B. Interpretation and Application of Article 67
299.
In order to ensure that information on available assistance is readily
accessible and to facilitate the monitoring of compliance with the
obligation of Article 67, developed country
Members have agreed to present descriptions of their relevant technical
and financial cooperation programmes and to update this annually. For
the sake of transparency, intergovernmental organizations have also
presented, on the invitation of the Council, information on their
activities.(312)
300.
At its meeting in July 1996, the TRIPS Council agreed that each
developed country Member should notify a contact point for technical
cooperation on TRIPS, in particular for the exchange of information
between donors and recipients of technical assistance.(313)
301.
Article 4 of the Agreement
between the World Intellectual Property Organization and World Trade
Organization contains provisions on legal-technical assistance and
technical cooperation.(314)
LXIX. Article
68
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A. Text of
Article 68
Article 68: Council for Trade-Related Aspects
of Intellectual Property Rights
The Council for TRIPS
shall monitor the operation of this Agreement and, in particular,
Members’ compliance with their obligations hereunder, and shall afford
Members the opportunity of consulting on matters relating to the
trade-related aspects of intellectual property rights. It shall carry
out such other responsibilities as assigned to it by the Members, and it
shall, in particular, provide any assistance requested by them in the
context of dispute settlement procedures. In carrying out its functions,
the Council for TRIPS may consult with and seek information from any
source it deems appropriate. In consultation with WIPO, the Council
shall seek to establish, within one year of its first meeting,
appropriate arrangements for cooperation with bodies of that
Organization.
B. Interpretation and Application of Article 68
1. Rules of procedure
of the Council for TRIPS
302.
At its meetings of 24 May 1995 and 21 September 1995, the Council for
TRIPS adopted its rules of procedure. At its meeting on 15 November
1995, the General Council approved those rules of procedure.(315)
2. Observer status
303.
With respect to the entities that have been granted observer status in
the Council for TRIPS, see below.
(a) Organizations
granted observer status
- Food and Agricultural Organization (FAO)
- International Monetary Fund (IMF)
- International Union for the Protection of New Varieties of Plants (UPOV) —
- Organization for Economic Cooperation and Development (OECD)
- United Nations (UN)
- United Nations Conference on Trade and Development (UNCTAD)
- World Bank
- World Customs Organization (WCO)
- World Intellectual Property Organization (WIPO)
(b) Organizations
having ad hoc observer status
- World Health Organization (WHO)
3. Cooperation with
WIPO
304.
At its meeting of 11 December 1995, the Council for TRIPS approved the
text of a proposed agreement between the World Intellectual Property
Organization and the World Trade Organization, and agreed to submit it
to the General Council for its approval. At its meeting on 13 December
1995, the General Council approved the proposed agreement.(316)
The Agreement was signed on behalf of the organizations on 22 December
1995 and entered into force on 1 January 1996.
305.
On 29 November 2005, the Council for TRIPS adopted a decision extending
the transition period under Article 66.1
for least-developed country Members. Paragraphs 2–4 of the decision
concern enhanced technical cooperation for least-developed country
Members. Paragraph 4 reads as follows:
“In order to assist least-developed country
Members to draw up the information to be presented in accordance with
paragraph 2, and with a view to making technical assistance and capacity
building as effective and operational as possible, the WTO shall seek to
enhance its cooperation with the World Intellectual Property
Organization and with other relevant international organizations.”(317)
LXX. Article
69
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A. Text of
Article 69
Article 69: International Cooperation
Members agree to cooperate with each other with a view to eliminating
international trade in goods infringing intellectual property rights.
For this purpose, they shall establish and notify contact points in
their administrations and be ready to exchange information on trade in
infringing goods. They shall, in particular, promote the exchange of
information and cooperation between customs authorities with regard to
trade in counterfeit trademark goods and pirated copyright goods.
B. Interpretation and Application of Article 69
1. Notification
requirements
306.
At its meeting of 21 September 1995, the Council for TRIPS adopted a
common procedure for the notification of contact points that Members had
established for the purposes of Article
69.(318)
LXXI. Article
70
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A. Text of
Article 70
Article 70: Protection of Existing Subject Matter
1.
This Agreement does not give rise to obligations in respect of acts
which occurred before the date of application of the Agreement for the
Member in question.
2.
Except as otherwise provided for in this Agreement, this Agreement gives
rise to obligations in respect of all subject matter existing at the
date of application of this Agreement for the Member in question, and
which is protected in that Member on the said date, or which meets or
comes subsequently to meet the criteria for protection under the terms
of this Agreement. In respect of this paragraph and paragraphs 3
and 4, copyright obligations with respect to
existing works shall be solely determined under Article 18 of the Berne Convention
(1971), and obligations with respect to the rights of producers of
phonograms and performers in existing phonograms shall be determined
solely under
Article 18 of the Berne Convention (1971) as made applicable under
paragraph 6 of Article 14 of this Agreement.
3.
There shall be no obligation to restore protection to subject matter
which on the date of application of this Agreement for the Member in
question has fallen into the public domain.
4.
In respect of any acts in respect of specific objects embodying
protected subject matter which become infringing under the terms of
legislation in conformity with this Agreement, and which were commenced,
or in respect of which a significant investment was made, before the
date of acceptance of the WTO Agreement by that Member, any Member may
provide for a limitation of the remedies available to the right holder
as to the continued performance of such acts after the date of
application of this Agreement for that Member. In such cases the Member
shall, however, at least provide for the payment of equitable
remuneration.
5.
A Member is not obliged to apply the provisions of
Article 11 and of paragraph 4 of Article 14
with respect to originals or copies purchased prior to the date of
application of this Agreement for that Member.
6.
Members shall not be required to apply
Article 31, or the requirement
in paragraph 1 of Article 27
that patent rights shall be enjoyable without discrimination as to the
field of technology, to use without the authorization of the right
holder where authorization for such use was granted by the government
before the date this Agreement became known.
7.
In the case of intellectual property rights for which protection is
conditional upon registration, applications for protection which are
pending on the date of application of this Agreement for the Member in
question shall be permitted to be amended to claim any enhanced
protection provided under the provisions of this Agreement. Such
amendments shall not include new matter.
8.
Where a Member does not make available as of the date of entry into
force of the WTO Agreement patent protection for pharmaceutical and
agricultural chemical products commensurate with its obligations under
Article 27, that Member shall:
(a)
notwithstanding the provisions of Part VI, provide as from the date of entry into
force of the WTO Agreement a means by which applications for patents for
such inventions can be filed;
(b)
apply to these applications, as of the date of application of this
Agreement, the criteria for patentability as laid down in this Agreement
as if those criteria were being applied on the date of filing in that
Member or, where priority is available and claimed, the priority date of
the application; and
(c)
provide patent protection in accordance with this Agreement as from the
grant of the patent and for the remainder of the patent term, counted
from the filing date in accordance with Article 33 of this
Agreement, for those of these applications that meet the criteria
for protection referred to in subparagraph (b).
9.
Where a product is the subject of a patent application in a Member in
accordance with paragraph 8(a), exclusive
marketing rights shall be granted, notwithstanding the provisions of
Part VI, for a period of five years after obtaining marketing approval
in that Member or until a product patent is granted or rejected in that
Member, whichever period is shorter, provided that, subsequent to the
entry into force of the WTO Agreement, a patent application has been
filed and a patent granted for that product in another Member and
marketing approval obtained in such other Member.
B. Interpretation and Application of Article 70
1. General
(a) Relationship
between Article 70.1 and 70.2
307.
In Canada — Patent Term, Canada argued that the grant of a
patent term is an integral part of the act granting the patent in
question. As such, Canada considered that the length of the patent terms
falls within the scope of the term “act” contained in Article
70.1. From this, Canada concluded that the grant of the patent term
is part of an act which occurred before the entry into force of the
TRIPS Agreement, with the result that Article 33
did not apply. With respect to the relationship between Article 70.1
and
70.2, Canada argued that the phrase “except
as otherwise provided for in this Agreement” demonstrates that Article 70.2
does not apply in this instance and that
Article 70.1 takes precedence over Article
70.2. The Appellate Body rejected this argument:
“Like the Panel, we see Articles 70.1
and
70.2 as dealing with two distinct and
separate matters. The former deals with past ‘acts’, while the
latter deals with ‘subject-matter’ existing on the applicable date
of the TRIPS Agreement. Article 70.1 of the TRIPS
Agreement operates only to exclude obligations in respect of ‘acts
which occurred’ before the date of application of the TRIPS Agreement,
but does not exclude rights and obligations in respect of continuing
situations. On the contrary, ‘subject matter existing … which is
protected’ is clearly a continuing situation, whether viewed as
protected inventions, or as the patent rights attached to them. ‘Subject
matter existing … which is protected’ is not within the scope of
Article 70.1, and, therefore, the ‘[e]xcept as otherwise provided
for’ clause in Article 70.2 can have no
application to it. Thus, for the sake of argument, even if there is a
relationship between Article 70.1 and the
opening proviso in Article 70.2, Canada’s
argument with respect to Old Act patents fails nonetheless, as we have
concluded that the continuing rights relating to Old Act patents do not
fall within the scope of Article 70.1.
We wish to point out that our interpretation of Article 70
does not lead to a ‘retroactive’ application of the TRIPS Agreement. Article
70.1 alone addresses ‘retroactive’ circumstances, and it
excludes them generally from the scope of the Agreement. The application
of
Article 33 to inventions protected under Old Act patents is
justified under Article 70.2, not Article
70.1. A treaty applies to existing rights, even when those rights
result from ‘acts which occurred’ before the treaty entered into
force.”(319)
2. Article 70.1
(a) “acts which
occurred before the date of application of the Agreement”
308.
In Canada — Patent Term, in the context of juxtaposing the term
“acts” under Article 70.1 and the term
“subject-matter” under Article 70.2, the
Appellate Body held with respect to the former:
“Our main task is to give meaning to the phrase
‘acts which occurred before the date of application’ and to
interpret Article 70.1
harmoniously with the rest of the provisions of Article
70. We are of the view that the term ‘acts’ has been used in Article 70.1
in its normal or ordinary sense of ‘things done’, ‘deeds’, ‘actions’
or ‘operations’. In the context of ‘acts’ falling within the
domain of intellectual property rights, the term ‘acts’ in Article
70.1 may, therefore, encompass the ‘acts’ of public authorities
(that is, governments as well as their regulatory and administrative
authorities) as well as the ‘acts’ of private or third parties.
Examples of the ‘acts’ of public authorities may include, in the
field of patents, the examination of patent applications, the grant or
rejection of a patent, the revocation or forfeiture of a patent, the
grant of a compulsory licence, the impounding by customs authorities of
goods alleged to infringe the intellectual property rights of a holder,
and the like. Examples of ‘acts’ of private or third parties may
include ‘acts’ such as the filing of a patent application,
infringement or other unauthorized use of a patent, unfair competition,
or abuse of patent rights.”(320)
309.
The Appellate Body then reached a conclusion on the scope of application
of Article 70.1:
“We conclude, therefore, that Article 70.1 of the TRIPS Agreement
cannot be interpreted to exclude existing rights, such as patent rights,
even if such rights arose through acts which occurred before the date of
application of the TRIPS Agreement for a Member. We, therefore, confirm
the finding of the Panel that Article 70.1
does not exclude from the scope of the TRIPS Agreement Old Act patents
[i.e. Canadian patents granted on the basis of patent applications filed
before 1 October 1989] that existed on the date of application of the
TRIPS Agreement for Canada.”(321)
310.
In reaching the previous conclusion, the Appellate Body relied both on
the wording of Article 70.1, as well as on
the object and purpose of the TRIPS Agreement:
“The ordinary meaning of the term ‘acts’
suggests that the answer to this question must be no. An ‘act’ is
something that is ‘done’, and the use of the phrase ‘acts which
occurred’ suggests that what was done is now complete or ended. This
excludes situations, including existing rights and obligations, that
have not ended. Indeed, the title of Article 70,
‘Protection of Existing Subject Matter’, confirms contextually that
the focus of Article 70 is on bringing within
the scope of the TRIPS Agreement ‘subject matter’ which, on
the date of the application of the Agreement for a Member, is existing
and which meets the relevant criteria for protection under the
Agreement.
A contrary interpretation would seriously erode
the scope of the other provisions of Article 70,
especially the explicit provisions of
Article 70.2. Almost any existing situation or right can be said to
have arisen from one or more past ‘acts’. For example, virtually all
contractual and property rights could be said to arise from ‘acts
which occurred’ in the past. If the phrase ‘acts which occurred’
were interpreted to cover all continuing situations involving
patents which were granted before the date of application of the TRIPS
Agreement for a Member, including such rights as those under Old
Act patents, then Article 70.1 would
preclude the application of virtually the whole of the TRIPS Agreement
to rights conferred by the patents arising from such ‘acts’. This is
not consistent with the object and purpose of the TRIPS Agreement,
as reflected in the
Preamble of the Agreement.”(322)
3. Article 70.2
(a) “subject
matter existing at the date of application of this Agreement”
311.
In Canada — Patent Term, the Appellate Body distinguished
clearly between the term “acts” within Article
70.1. and the term “subject-matter” under Article
70.2. With respect to the latter term, the Appellate Body relied, inter alia,
on the use of the term in other provisions of the TRIPS Agreement:
“We agree with the Panel’s reasoning that ‘subject
matter’ in
Article 70.2 refers, in the case of patents, to inventions. The
ordinary meaning of the term ‘subject-matter’ is a ‘topic dealt
with or the subject represented in a debate, exposition, or work of art’.
Useful context is provided by the qualification of the term ‘subject
matter’, in the same sentence of Article 70.2,
by the word ‘protected’, as well as by the phrase ‘meet the
criteria for protection under the terms of this Agreement’ appearing
later in the same sentence. As noted earlier, the title to Article 70
also uses the words ‘Protection of Existing Subject Matter’. We can
deduce, therefore, that the ‘subject matter’, for purposes of Article 70.2,
is that which is ‘protected’, or ‘meets the criteria for
protection’, under the terms of the TRIPS Agreement. As, in the
present case, patents are the means of protection, then whatever patents
protect must be the ‘subject matter’ to which
Article 70.2 refers.
Articles 27,
28, 31
and
34 of the TRIPS Agreement also
use the words ‘subject-matter’ with respect to patents and provide
an equally useful context for interpretation. Article
27, entitled ‘Patentable Subject-matter’, states: ‘patents
shall be available for any inventions’… . This Article
identifies the criteria that an invention must fulfill in order to be
eligible to receive a patent, and it also identifies the types of
inventions that may be excluded from patentability even if they meet
those criteria. On the other hand, in
Articles 28, 31 and 34,
the words ‘subject-matter’ relate to patents that are granted
pursuant to the criteria in Article
27; that is to say, these Articles relate to inventions that are
protected by patents granted, as distinguished from the ‘patentable’
inventions to which
Article 27 refers. These Articles confirm the conclusion that inventions
are the relevant ‘subject-matter’ in the case of patents, and that
the ‘subject-matter’ in Article 70.2
means, in the case of patents, patentable or patented inventions. Article 70.2
thus gives rise to obligations in respect of all such inventions
existing on the date of application of the TRIPS Agreement for a
Member. In the appeal before us, where the measure in dispute is Section
45 of Canada’s Patent
Act, which applies to Old Act patents, the word ‘subject-matter’
means the inventions that were protected by those patents. We,
therefore, confirm the conclusion of the Panel in this regard.”(323)
4. Article 70.8
(a) “a means by
which applications for patents for such inventions can be filed”
312.
In India — Patents (US), in reviewing the Panel’s finding
that the patent law of India was inconsistent with Article
70.8, the Appellate Body considered the meaning of the term “means”
within the phrase “ a means by which applications for patents for such
inventions can be filed”:
“Article 70.8(a)
imposes an obligation on Members to provide ‘a means’ by which
mailbox applications can be filed ‘from the date of entry into force
of the WTO Agreement’. Thus, this obligation has been in force since 1
January 1995. The issue before us in this appeal is not whether this
obligation exists or whether this obligation is now in force. Clearly,
it exists, and, equally clearly, it is in force now. The issue before us
in this appeal is: what precisely is the ‘means’ for filing mailbox
applications that is contemplated and required by Article
70.8(a)?
…
We believe the Panel was correct in finding that
the ‘means’ that the Member concerned is obliged to provide under Article 70.8(a)
must allow for ‘the entitlement to file mailbox applications and the
allocation of filing and priority dates to them’. Furthermore, the
Panel was correct in finding that the ‘means’ established under
Article 70.8(a) must also provide ‘a sound legal basis to
preserve novelty and priority as of those dates’. These findings flow
inescapably from the necessary operation of paragraphs (b)
and
(c) of
Article 70.8.”(324)
313.
While the term “means” was held to include the notion of a “sound
legal basis”, the Appellate Body also found that such a “sound legal
basis” did not have to provide for complete legal certainty with
respect to the future grant of the relevant patent:
“However, we do not agree with the Panel that Article 70.8 (a)
requires a Member to establish a means ‘so as to eliminate any
reasonable doubts regarding whether mailbox applications and eventual
patents based on them could be rejected or invalidated because, at the
filing or priority date, the matter for which protection was sought was
unpatentable in the country in question’. India is entitled, by the
‘transitional arrangements’ in paragraphs 1,
2 and 4 of Article
65, to delay application of Article 27
for patents for pharmaceutical and agricultural chemical products until
1 January 2005. In our view, India is obliged, by Article 70.8(a),
to provide a legal mechanism for the filing of mailbox applications that
provides a sound legal basis to preserve both the novelty of the
inventions and the priority of the applications as of the relevant
filing and priority dates. No more.”(325)
5. Article 70.9
(a) “exclusive
marketing rights”
314.
In India — Patents (US), reviewing the Panel’s finding that
the patent law of India was inconsistent with Article
70.9, the Appellate Body addressed the relationship between Article 70.8(a)
and 70.9:
“By its terms, Article 70.9
applies only in situations where a product patent application is filed
under Article
70.8(a). Like Article 70.8(a), Article 70.9
applies ‘notwithstanding the provisions of Part VI’. Article 70.9
specifically refers to Article
70.8(a), and they operate in tandem to provide a package of rights
and obligations that apply during the transitional periods contemplated
in Article
65. It is obvious, therefore, that both Article 70.8(a)
and
Article 70.9 are intended to apply as from
the date of entry into force of the WTO Agreement.”(326)
315.
In India — Patents (EC), examining the EC claim under
Article 70.9, the Panel addressed the argument by India that Article
70.9, by referring only to the grant of “exclusive marketing
rights” should be distinguished from e.g. the phrase “patents shall
be available” under Article 27:
“India essentially repeats its arguments in the
previous case that the obligations under Article 70.9
should be distinguished from those under other provisions of the TRIPS
Agreement because it uses the term ‘exclusive marketing rights shall
be granted …’. According to India, there is a material difference
between this expression and such other expressions as ‘patents shall
be available …’ in Article
27. We disagree. The Panel report in dispute WT/DS50 [India —
Patents (US)] points out that the term ‘right’ connotes an
entitlement to which a person has a just claim and that, as such, it
implies general, non-discretionary availability in the case of those
eligible to exercise it. It was held that an exclusive marketing right
could not be ‘granted’ in a specific case unless it was ‘available’
in the first place. The Panel’s view was upheld by the Appellate Body,
and we do not see any reason to adopt a different position in the
present case. In this connection, we would also note that India
considers that exclusive marketing rights are to be granted in response
to requests from those who are eligible. In our view, a request-based
system of rights cannot operate effectively unless there is a mechanism
in place that establishes general availability and enables such requests
to be made.”(327)
(b) Least-developed
country Members
316.
On 8 July 2002 the General Council adopted a waiver of the obligations
of least-developed country Members under paragraph 9 of
Article 70 with respect to pharmaceutical products until 1 January
2016.(328)
6. Relationship with
other Articles
(a) Relationship
between Section 5 of Part II and Article 70.2
317.
In Canada — Patent Term, the Appellate Body addressed the
relationship between Section 5 and Article
70.2:
“ Article 70.2
applies the obligations of the TRIPS Agreement to ‘all subject matter
existing … and which is protected’ on the date of application of
the TRIPS Agreement for a Member. A Member is required, as from that
date, to implement all obligations under the TRIPS Agreement in respect
of such existing subject matter. This includes the obligation in Article
33. We see no basis in the text for isolating or insulating the
obligation in Article 33
relating to the duration of a patent term from the other obligations
relating to patents that are also found in Section 5 of the TRIPS
Agreement. There is nothing whatsoever in Section 5 to indicate that the
obligation relating to patent term in Article 33
differs in application in any respect from the other obligations in
Section 5. An obligation that relates to duration must necessarily have
a beginning and an end date. On that ground alone, it cannot be argued
that the obligation is attached to, and arises uniquely from, certain
‘acts’. Although Canada has not done so, it could just as easily be
argued that the exclusive rights under Article 28
are also an ‘integral part’ of the ‘act’ of granting a patent,
as those rights also can arise only from the grant and consequent
existence of a patent.”(329)
(b) Relationships
between Articles 65 and 66 and Article 70.8 and 70.9
318.
With respect to the relationship between
Article 65 and Article
70.8, see paragraph 292 above. With respect to
the relationship between
Articles 65 and 66 and Article
70.9, see paragraph 293 above.
LXXII. Article
71
back to top
A. Text of
Article 71
Article 71: Review and Amendment
1.
The Council for TRIPS shall review the implementation of this Agreement
after the expiration of the transitional period referred to in
paragraph 2 of Article 65. The Council shall, having regard to the
experience gained in its implementation, review it two years after that
date, and at identical intervals thereafter. The Council may also
undertake reviews in the light of any relevant new developments which
might warrant modification or amendment of this Agreement.
2.
Amendments merely serving the purpose of adjusting to higher levels of
protection of intellectual property rights achieved, and in force, in
other multilateral agreements and accepted under those agreements by all
Members of the WTO may be referred to the Ministerial Conference for
action in accordance with paragraph 6 of Article X of the
WTO Agreement on the basis of a consensus proposal from the Council
for TRIPS.
B. Interpretation and Application of Article 71
319.
The Council for TRIPS took up the issue of the review of implementation
of the TRIPS Agreement under Article 71.1
at its meeting in March 2000.(330)
320.
In paragraph 19 of the Doha Ministerial Declaration, adopted on 14
November 2001, Ministers “instruct[ed] the Council for TRIPS, in
pursuing its work programme including under the review of Article
27.3(b), the review of the implementation of the TRIPS Agreement
under
Article 71.1 and the work foreseen pursuant to paragraph 12 of this
Declaration, to examine, inter alia, the relationship between the
TRIPS Agreement and the Convention on Biological Diversity, the
protection of traditional knowledge and folklore, and other relevant new
developments raised by Members pursuant to Article
71.1.”(331)
In paragraph 44 of the Hong Kong Ministerial Declaration, Ministers “[took]
note of the work undertaken by the Council for TRIPS pursuant to
paragraph 19 of the Doha Ministerial Declaration and agree[d] that this
work shall continue on the basis of paragraph 19 of the Doha Ministerial
Declaration and the progress made in the Council for TRIPS to date”.
They instructed the General Council to report on its work in this regard
to their next Session.”(332)
LXXIII. Article
72
back to top
A. Text of
Article 72
Article 72: Reservations
Reservations may not be entered in respect of any of the provisions
of this Agreement without the consent of the other Members.
B. Interpretation
and Application of Article 72
No jurisprudence or decision of a competent WTO body.
LXXIV. Article
73
back to top
A. Text of
Article 73
Article 73: Security Exceptions
Nothing in this Agreement shall be construed:
(a)
to require a Member to furnish any information the disclosure of which
it considers contrary to its essential security interests; or
(b)
to prevent a Member from taking any action which it considers necessary
for the protection of its essential security interests;
(i)
relating to fissionable materials or the materials from which they are
derived;
(ii)
relating to the traffic in arms, ammunition and implements of war and to
such traffic in other goods and materials as is carried on directly or
indirectly for the purpose of supplying a military establishment;
(iii)
taken in time of war or other emergency in international relations; or
(c)
to prevent a Member from taking any action in pursuance of its
obligations under the United Nations Charter for the maintenance of
international peace and security.
B. Interpretation and Application of Article 73
No jurisprudence or decision of a competent WTO body.
Footnotes:
217. Panel Report, EC — Trademarks and Geographical Indications
(US), para. 7.761. See also Panel Report, EC — Trademarks and Geographical Indications
(Australia), para. 7.731. back to text
218. (footnote original) The Panel’s approach does not imply
any view as to whether the phrase “any act of infringement of
intellectual property rights covered by this Agreement” refers only to
acts of infringement of the exclusive rights provided for in the TRIPS
Agreement. back to text
219. Panel Report, China — Intellectual Property Rights,
para.
7.173. back to text
220. With respect to the claim that an equivalent “effective”
period of protection can fulfill the requirement of Article
33, see
paragraphs 211–214 above. back to text
221. Panel Report, Canada — Patent Term,
paras. 6.117–6.118.
back to text
222. Panel Report, EC — Trademarks and Geographical Indications
(Australia), para. 7.731. back to text
223. Panel Report, China — Intellectual Property Rights,
para.
7.168. back to text
224. Appellate Body Report, US — Section 211 Appropriations Act,
para. 217. back to text
225. Appellate Body Report, US — Section 211 Appropriations Act,
paras. 221 and 226. back to text
226. Appellate Body Report, US — Section 211 Appropriations Act,
paras. 222 to 231 and 358. back to text
227. Panel Report, India — Patents (EC),
para. 7.66.
back to text
228. Panel Report, China — Intellectual Property Rights,
para.
7.260. back to text
229. Panel Report, China — Intellectual Property Rights,
para.
7.262. back to text
230. Panel Report, China — Intellectual Property Rights,
para.
7.263. back to text
231. Panel Report, China — Intellectual Property Rights,
para.
7.240. back to text
232. Panel Report, China — Intellectual Property Rights,
para.
7.218. back to text
233. Panel Report, China — Intellectual Property Rights,
para.
7.221. back to text
234. (footnote original) There are some express differences
between the procedures applicable to different goods: Article 53.2 of
the TRIPS Agreement only applies to goods involving industrial designs,
patents, layout-designs or undisclosed information; the second sentence
of Article 59 only applies to counterfeit trademark goods. back to text
235. (footnote original) For example,
Articles 49 and 50.8 of
the TRIPS Agreement provide for optional procedures, subject to a
contingent obligation that they “shall conform to principles
equivalent in substance to those set forth” in the relevant Sections.
In contrast, footnote 13 to the TRIPS Agreement sets out an option but
contains no contingent obligation. However, footnote 13 limits the scope
of the obligation in the first sentence of Article 51 rather than
providing for an optional extension. back to text
236. Panel Report, China — Intellectual Property Rights,
paras. 7.223–7.224. back to text
237. Panel Report, China — Intellectual Property Rights,
para.
7.221. back to text
238. (footnote original) There are some express differences
between the procedures applicable to different goods: Article 53.2 of
the TRIPS Agreement only applies to goods involving industrial designs,
patents, layout-designs or undisclosed information; the second sentence
of Article 59 only applies to counterfeit trademark goods. back to text
239. Panel Report, China — Intellectual Property Rights,
para.
7.223. back to text
240. (footnote original) For example,
Articles 49 and 50.8 of
the TRIPS Agreement provide for optional procedures, subject to a
contingent obligation that they “shall conform to principles
equivalent in substance to those set forth” in the relevant Sections.
In contrast, footnote 13 to the TRIPS Agreement sets out an option but
contains no contingent obligation. However, footnote 13 limits the scope
of the obligation in the first sentence of Article 51 rather than
providing for an optional extension. back to text
241. (footnote original) The text of
Article 59 itself provides
a confirmation of this point. The second sentence refers to the “re-exportation”
of the infringing goods not “exportation”, which implies that the
counterfeit trademark goods are only presented for importation. back to text
242. Panel Report, China — Intellectual Property Rights,
para.
7.224. back to text
243. Panel Report, China — Intellectual Property Rights,
para.
7.234. back to text
244. (footnote original) New Shorter Oxford English
Dictionary (1993). back to text
245. (footnote original) This is without prejudice to other
obligations regarding enforcement. back to text
246. (footnote original) The phrasing in
Article 57 is slightly
different. The phrase “shall have the authority” is also used in
Articles 31(g), (k) and 34.1 in Part II of the TRIPS Agreement. back to text
247. (footnote original) Certain obligations guide the exercise
of that discretion, for example, the principle of proportionality and
the need to take into account the interests of third parties under the
third sentence of Article 46. back to text
248. Panel Report, China — Intellectual Property Rights,
paras. 7.236–7.238. back to text
249. Panel Report, China — Intellectual Property Rights,
paras. 7.239–7.240. See also paras. 7.285, 7.309 and 7.327. back to text
250. Panel Report, China — Intellectual Property Rights,
para.
7.252. back to text
251. Panel Report, China — Intellectual Property Rights,
para.
7.246. See also para. 7.251. back to text
252. Panel Report, China — Intellectual Property Rights,
para.
7.247. back to text
253. Panel Report, China — Intellectual Property Rights,
para.
7.279. back to text
254. Panel Report, China — Intellectual Property Rights,
para.
7.255. back to text
255. Panel Report, China — Intellectual Property Rights,
para.
7.256. See also para. 7.259. back to text
256. Panel Report, China — Intellectual Property Rights,
paras. 7.264–7.265. back to text
257. Panel Report, China — Intellectual Property Rights,
paras. 7.266–7.269. back to text
258. Panel Report, China — Intellectual Property Rights,
para.
7.273–7.274. back to text
259. Panel Report, China — Intellectual Property Rights,
para.
7.279–7.280. back to text
260. Panel Report, China — Intellectual Property Rights,
para.
7.281–7.284. back to text
261. Panel Report, China — Intellectual Property Rights,
paras. 7.286–7.324 (with respect donation to social welfare bodies);
paras. 7.325–7.326 (with respect sale to the right holder); and paras.
7.327–7.355 (with respect to auction). back to text
262. Panel Report, China — Intellectual Property Rights,
paras. 7.327–7.328. back to text
263. Panel Report, China — Intellectual Property Rights,
para.
7.343. back to text
264. Panel Report, China — Intellectual Property Rights,
paras. 7.351–7.353. back to text
265. Panel Report, China — Intellectual Property Rights,
para.
7.354. back to text
266. (footnote original) The position is the same under the
second sentence of Article 59. back to text
267. Panel Report, China — Intellectual Property Rights,
para.
7.358–7.359. back to text
268. Panel Report, China — Intellectual Property Rights,
para.
7.369. back to text
269. Panel Report, China — Intellectual Property Rights,
paras. 7.380–7.382. back to text
270. Panel Report, China — Intellectual Property Rights,
paras. 7.373, 7.379. back to text
271. Panel Report, China — Intellectual Property Rights,
para.
7.389. back to text
272. Panel Report, China — Intellectual Property Rights,
paras. 7.391–7.392. back to text
273. Panel Report, China — Intellectual Property Rights,
para.
7.505. See also paras. 7.513 and 7.515. back to text
274. Panel Report, China — Intellectual Property Rights,
paras. 7.514, 7.528. back to text
275. Panel Report, China — Intellectual Property Rights,
para.
7.650–7.651. back to text
276. Panel Report, China — Intellectual Property Rights,
para.
7.516. back to text
277. Panel Report, China — Intellectual Property Rights,
para.
7.518. back to text
278. Panel Report, China — Intellectual Property Rights,
para.
7.518–7.524. back to text
279. Panel Report, China — Intellectual Property Rights,
paras. 7.525–7.526. back to text
280. (footnote original) The terms “counterfeit trademark
goods” and “pirated copyright goods” are used not only in Section
4 of Part III but also in Article 69 of the TRIPS
Agreement. The
identical term “counterfeit trademark goods” is also used in Article
46. back to text
281. Panel Report, China — Intellectual Property Rights,
para.
7.521. See also para. 7.520, 7.572. back to text
282. (footnote original) This finding is without prejudice to
the qualitative aspect of “commercial scale” considered with respect
to the second limb of this claim. back to text
283. Panel Report, China — Intellectual Property Rights,
paras. 7.577–7.578. back to text
284. (footnote original) The United States’ concern regarding
the volume of distribution by means of digital technology and the
Internet is therefore relevant to the assessment of a “commercial
scale”: see United States’ rebuttal submission, para. 112. back to text
285. Panel Report, China — Intellectual Property Rights,
para.
7.657. back to text
286. Panel Report, China — Intellectual Property Rights,
para.
7.601–7.602. back to text
287. Panel Report, China — Intellectual Property Rights,
para.
7.602. See also paras. 7.604–7.605. back to text
288. Panel Report, China — Intellectual Property Rights,
para.
7.553. back to text
289. With respect to the claim that an equivalent “effective”
period of protection can fulfill the requirement of Article
33, see
paras. 211–214 of this Chapter. back to text
290.
Appellate Body Report, Canada — Patent Term, para. 97.
back to text
291. Panel Report, EC — Trademarks and Geographical Indications
(Australia), para. 7.731. See also Panel Report, EC — Trademarks and Geographical Indications
(US), para. 7.756. back to text
292. IP/C/M/4, Section
A.2.(i). The procedures can be found in Council
Decision
IP/C/2. back to text
293. IP/C/M/4, Section
A.2.(i). The format can be found in Decision of
the Council for TRIPS,
IP/C/4. back to text
294. IP/C/M/4, Section
A.2.(i). The Checklist can be found in Decision
of the Council for TRIPS,
IP/C/5. back to text
295. The text of the Agreement can be found in
IP/C/6.
back to text
296. The text of the Decision can be found in
WT/MIN(01)/17.
back to text
297. The text of the Decision can be found in
WT/L/579.
back to text
298. The text of the Declaration can be found in
WT/MIN(05)/DEC.
back to text
299. Before the adoption of the decision, the Chairman made the
following statement: “It is understood that paragraph 4 of Article 31bis
in the proposed amendment is without prejudice to the overall question
of the applicability of subparagraphs 1(b) and 1(c) of Article XXIII of
GATT 1994 to the TRIPS Agreement and to the different positions of
Members on this subject.” This statement is recorded in paragraph 28
of the minutes of the General Council meeting in
WT/GC/M/100. back to text
300.
WT/L/783. back to text
301. Appellate Body Report, Canada — Patent Term,
para. 100.
back to text
302.
Panel Report, India — Patents (US), para. 7.27.
back to text
303. Panel Report, India — Patents (EC),
para. 8.1.
back to text
304.
Panel Report, Indonesia — Autos, para. 14.282.
back to text
305.
Panel Report, Indonesia — Autos, para. 14.266.
back to text
306.
Panel Report, India — Patents (US), para. 7.27.
back to text
307.
Panel Report, India — Patents (US), para. 7.59.
back to text
308. The Council for TRIPS adopted this decision pursuant to the
instruction of the Ministerial Conference in the Declaration on the
TRIPS Agreement and Public Health (WT/MIN(01)/DEC/2, reproduced in Section LXXVIII below). See the minutes of the Council for TRIPS’
meeting in
IP/C/M/36. The text of the adopted decision can be found in IP/C/25. At the same meeting, the Council for TRIPS approved a draft
waiver for least-developed country Members of obligations under Article
70.9 with respect to pharmaceutical products. See paragraph 316
below. back to text
309. The text of the adopted decision can be found in
IP/C/35.
back to text
310. Paragraphs 2–4 of the decision concern enhanced technical
cooperation for least-developed country Members. This decision is also
referred to in paragraph 251 below. The text of the adopted decision can
be found in IP/C/40. back to text
311. The Council for TRIPS adopted this decision pursuant to the
instruction of the Ministerial Conference in the Declaration on the
TRIPS Agreement and Public Health (WT/MIN(01)/DEC/2, reproduced in
Section LXXVIII below). See the minutes of the Council for TRIPS’
meeting in IP/C/M/39. The text of the adopted decision can be found in
IP/C/28. back to text
312. The Council for TRIPS first invited developed country Members and
intergovernmental organizations to present this information at its
meeting in May 1995 (paragraph 53 of IP/C/M/2). Since then, this
invitation has been renewed each year. back to text
313. Paragraphs 37–38 of IP/M/8. These notifications are being
circulated in the IP/N/7–series of documents. back to text
314. The text of the Agreement can be found in
IP/C/6.
back to text
315. IP/C/M/2, para 5;
IP/C/M/3,
para. 2;
WT/GC/M/8, para. 4. The
rules of procedure can be found in
IP/C/1. back to text
316.
IP/C/M/5, para. 9;
WT/GC/M/9, Section 1(e). The text of the
agreement can be found in
IP/C/6. back to text
317. This decision is also referred to in paragraph 242 above. The
text of the adopted decision can be found in IP/C/40. back to text
318. IP/C/M/3,
para. 27. back to text
319.
Appellate Body Report, Canada — Patent Term, paras. 69–70.
back to text
320.
Appellate Body Report, Canada — Patent Term, para. 54.
back to text
321.
Appellate Body Report, Canada — Patent Term, para. 60.
back to text
322.
Appellate Body Report, Canada — Patent Term, paras. 58–59.
back to text
323.
Appellate Body Report, Canada — Patent Term, paras. 65–66.
back to text
324.
Appellate Body Report, India — Patents (US), paras. 54
and 57. back to text
325.
Appellate Body Report, India — Patents (US), para. 58.
back to text
326.
Appellate Body Report, India — Patents (US), para. 82.
back to text
327. Panel Report, India — Patents (EC),
para. 7.65.
back to text
328. See the minutes of the General Council meeting in
WT/GC/M/75. The text of the waiver can be found in
WT/L/478. The Council
for TRIPS approved the draft waiver at its meeting on 27 June 2002. See
the minutes of its meeting in
IP/C/M/36. At the same meeting, the
Council for TRIPS adopted a decision extending the transition period
under Article 66.1 for least-developed country Members for certain
obligations with respect to pharmaceutical products. See
paragraph 294 above. back to text
329.
Appellate Body Report, Canada — Patent Term, para. 77.
back to text
330. IP/C/M/26. back to text
331. The text of the Declaration can be found in
WT/MIN(01)/DEC/1.
back to text
332. The text of the Declaration can be found in
WT/MIN(05)/DEC.
back to text
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