30 years of the TRIPS Agreement—and the cracks are showing

In force since 1995, the trade agreement’s blanket IP provisions are being challenged by emerging technologies and the different needs of individual countries, says Ana Neves of Inventa.

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) was established to facilitate trade between countries having different levels of IP protection.

It has been in force since 1995 and is binding on all World Trade Organization (WTO) members, setting the minimum global standards for intellectual property (IP) protection, including pharmaceutical patents.

TRIPS has established, among other things, 20 years of patent protection, the ability to protect both products and processes, and the protection of pharmaceutical test data against unfair commercial use.

TRIPS harmonises patent laws internationally, while leaving countries with the ability to define what qualifies as “new, inventive, and useful,” allowing some flexibility in how patents are granted.

However, some point that the agreement is a “one-size-fits-all” type of agreement that does not take into account the specificities and cultural differences of developed and developing countries.

While developed countries wanted strong IP protections, developing countries were concerned about the implications for access to technology and, in particular, essential medicines.

TRIPS sought to strike a balance between these diverse interests by setting minimum standards for IP protection. Thirty years later, it is worth assessing the impact of TRIPS on global trade.

The TRIPS Agreement

TRIPS is part of the agreements constituting the WTO. It marked a significant milestone in the globalisation of IP rights, requiring member countries to adhere to detailed standards and enforcement procedures regarding copyrighted works, patents, trademarks, geographical indications, industrial designs, and trade secrets.

The agreement also incorporated provisions to facilitate technology transfer to developing countries, emphasising the balance between innovation and equitable access.

Central to the establishment of the agreement is the technological advancements in the fields of software, pharmaceuticals, and entertainment, and the need to strengthen IP protection for innovations in these fields.

In particular, companies and industries based in advanced economies were keen to protect their innovations from unauthorised use in markets worldwide. Some countries, such as the US, members of the European Union, and Japan, were strong advocates for comprehensive IP protections, arguing that without robust IP enforcement, their industries could not compete fairly in the global market.

Furthermore, concerns over the theft of intellectual property and rampant piracy, particularly in software and entertainment industries, made a compelling case for an international framework to address these issues legally and systematically.

The TRIPS agreement intended to contribute for the regulation of conflicting IP frameworks across the world by:

• Promoting harmonisation of IP laws across different countries, making it easier for companies to navigate and enforce IP rights globally;
• Encouraging international trade and investment and increasing companies’ willingness to invest in foreign markets when they know their intellectual property will be protected from infringement;
• Creating an environment that rewards creativity and innovation by ensuring that inventors, writers, and artists can secure the economic benefits of their work;
• Incentivising research and development across various fields, including technology, pharmaceuticals, and the creative industries;
• Reducing trade barriers related to intellectual property issues, facilitating smoother and more predictable international transactions;
• Contributing to more stable and predictable international trade relations. This mechanism is part of the broader WTO dispute settlement system;
• Allowing for certain flexibilities and transitional periods for developing and least-developed countries, balancing the needs of different economies and addressing concerns regarding access to medicines and technology; and
• Helping combat counterfeiting and piracy, protecting both consumers and legitimate businesses from the economic and reputational damage caused by such activities.

Despite the many advantages brought by TRIPS, there are also some criticisms towards the agreement for seemingly serving corporate interests rather than development needs, potentially stifling innovation and development globally.

Most notably, some point out that TRIPS is based on a Western concept of IP that may not align with different cultural views on knowledge sharing, such as traditional knowledge.

Furthermore, the IP protection model proposed by TRIPS can impose significant costs on developing countries, leading to wealth transfers from these countries to developed nations, as they struggle to meet the uniform IP standards. This could hinder access to affordable medicines and diminish technological advancement by prioritising private rights over public good. Finally, the agreement lacks effective mechanisms to ensure technology transfer to developing countries.

TRIPS-plus provisions

In addition, the so-called TRIPS-plus provisions—provisions that go beyond the standards established in TRIPS—have been under discussion. TRIPS-plus provisions are not required by international law under the WTO, but are often imposed through bilateral or regional trade agreements. Common examples include:

• Patent term extensions beyond the 20-year TRIPS minimum;
• Restrictions on compulsory licensing, making it harder for governments to override patents for public health reasons;
• Limits on parallel importation of cheaper medicines;
• Data exclusivity, which prevents drug regulators from relying on existing clinical trial data to approve generics—even when no patent exists; and
• Stronger enforcement rules increasing legal risks for generic manufacturers.
• The existence of TRIPS-plus provisions in bilateral or regional trade agreements may suggest that the TRIPS agreement is no longer adapted to current markets and that 30 years after its inception, a revision or at least an update of the terms and standards of the agreement is in order.

TRIPS Agreement and software

Historically, courts have been hesitant to grant software patents, often classifying them as unpatentable algorithms. Also, stakeholders in the technical field discussed significantly over the patentability of software. However, this initial dispute gave room to the acceptance of computer-implemented inventions, with many leading tech nations accepting software patents.

The contribution of TRIPS to this acceptance is evident, with the clarification that software is classified under the copyright protection framework of the Berne Convention as a literary work, which indirectly supports its patentability.

Advancements in computer-implemented inventions and the Internet of Things (IoT) have further enabled the patenting of software previously deemed non-patentable.

For example, the practice established by the European Patent Office (EPO) requires that a software invention exhibits 'technical character,' for protection to be granted. Nevertheless, it has become trivial to obtain patent protection for inventions that rely on software.

Recent technological developments, in particular with AI, stress the need for a revision of TRIPS, incorporating global best practices and stakeholder input to better protect AI-based inventions.

This reevaluation is seen as crucial for protecting innovation without imposing unnecessary barriers and for establishing uniform protection practices that acknowledge the intellectual efforts behind software development in today's technology-dependent landscape.

TRIPS Agreement and pharmaceuticals

Facilitating access to medicines in developing and least developed countries is a cornerstone of the TRIPS agreement. In particular, the TRIPS agreement intended to facilitate access to affordable medicines with a particular focus on the WHO African Region.

TRIPS introduces provisions such as compulsory licensing and parallel importation, which allow countries to bypass patent restrictions under certain conditions to improve access to medicines.

These provisions enable access to production methods as described in patent documents. However, many countries face challenges in taking advantage of the TRIPS provisions due to various barriers, such as insufficient local pharmaceutical manufacturing capabilities.

For example, access to medicines in the WHO African Region is affected by factors beyond IP laws, including inadequate healthcare financing, logistical challenges, and weak regulatory frameworks.

On the other hand, while compulsory licensing and parallel importation facilitate access to medicines, allowing pharmaceutical companies to recoup R&D costs through patents, it has not motivated significant investment in treatments for diseases prevalent in developing countries.

Critical public health emergencies like the Ebola and COVID-19 pandemics have highlighted the tension between IP protection and the urgent need for medicine access.

For example, remdesivir, a drug originally developed and clinically tested for the treatment of Ebola, with significant public and international funding, failed to prove effective for that indication.

It was later repurposed for the treatment of COVID-19, where it received emergency authorisations in multiple countries. Despite its repurposed nature and the substantial public investment involved in its development, remdesivir remained protected by a series of patent rights and exclusive licensing arrangements.

These IP barriers limited competition, constrained global manufacturing capacity, and contributed to high prices and unequal access, particularly in low- and middle-income countries.

The remdesivir case, therefore, highlights how existing IP frameworks, designed primarily to incentivise innovation under normal market conditions, can conflict with urgent public-health needs during global crises.

These constraints have led to alternative models like Product Development Partnerships (PDPs) and highlight the need to implement additional provisions or reinforce regional collaborations to support public health needs in developing countries.

TRIPS Agreement and entertainment industries

IP rights are critical in safeguarding the creative endeavours of artists, musicians, filmmakers, and other practitioners within the entertainment industry as they encompass both moral rights, which protect the creator's reputation, and economic rights, allowing creators to profit from their works.

In the context of the entertainment industry, TRIPS reinforces the protection of creators’ economic and moral rights, supporting the commercial exploitation of creative works and discouraging unauthorised copying and distribution. However, digital technologies – online piracy, global streaming platforms, and cross-border dissemination – have intensified enforcement challenges under the TRIPS framework, necessitating stronger international cooperation and complementary treaties such as the WIPO Copyright Treaty.

The dynamic digital landscape requires ongoing adaptation and cooperation among international stakeholders to protect IP effectively and ensure that creators receive fair acknowledgement and compensation.

TRIPS has been supporting IP protection and fostering international trade cooperation for 30 years. However, recent technological developments require a balanced approach to intellectual property that takes into account the new trade challenges posed by emerging technologies.

The uniform approach of TRIPS seems outdated and unable to equally support countries with varying levels of country development, suggesting the need for a revision that takes into account the individual countries' economies and developmental needs.

Ana Neves is a patent consultant at Inventa, and can be contacted at aneves@inventa.com