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IMPACT OF TRIPS ON LEAST DEVELOPED COUNTRY AND DEVELOPING COUNTRY

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As we know that Intellectual Property are key factor for growth and development of country and its economy. so, in order to provide protection to Intellectual Property across national boarder and provide strength to these law TRIPS agreement was enforced from 1st January 1995. Prior to these agreement Intellectual property laws in different country were different according to their social, economic condition and holder. These TRIPS agreement gives these intellectual Property law standard form and same policy.

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While establishing or enforcing these agreements several precautions were taken whether country is Developed, Least Developed or Developing and this process special incentives were given to Least developed country and Developing country. This gives some opportunity to developing and LDC to make growth.

IMPACT OF TRIPS ON IPR LAW

  • This TRIPS agreement provides norms and standard to IPR like Copy-Right, Trade-mark, Patent, Industrial Design Layout design of Integrated circuit, Plant varieties and undisclosed information.
  • As mentioned above norms and standards were provided to Patent, it was mandatory to grant Product and Process Patent, these effected to country like India and Brazil; where process patent was granted. As compulsion of product patent use of Reverse Engineering restricted.
  • TRIPS mandatory required that term of protection should not be less than 20 years. There was danger of extension of such patent by making some changes in product and extend monopoly. This limitation may cause negative impact of monopoly and create problem of anti-competitive practices. To solve these problem TRIPS provided government some special rules which consist of Compulsory Licencing and Parallel Importation of Patented product. These are only implemented in pharmaceutical and agricultural chemical industry.

Compulsory licencing enables government to issue licence to anyone it may be private, govt funded or third party to utilize patent without consent of patent holder. There are certain conditions required to meet for granting compulsory licencing. There are many argument on use of compulsory licencing by developed countries, But in reality this compulsory licencing provides domestic manufacturer job opprtunity, this helps to developing and LDC to maintain competition and availability of drug to customer at lower cost.

Parallel Import Involve import and resale of drug, without consent of patent holder. This help maintains low cost of product avoid problem of market segmentation and prize discrimination by patent

Use of Transition Period.

In Beginning of TRIPS developing Countries were allowed to use 5 years’ time for making Policy, Law as per TRIPS agreement further it was expanded by more 5 years. In these mean time countries fully utilized their old policy for more benefits and development.

In case of LDC initial extension period was 10 years further it increased to 2013 and finally to 2021 with additional freedom for sectors like Pharmaceutical Industry and Agricultural Chemicals till 2033. Least Developing Country like Bangladesh utilizing this transition time for production of Generic medicine. They are allowed to sell this medicine in all LDC. As they using their old policy which consist patent life for 16 years . Annual growth rate of Bangladesh in pharmaceutical industry around 16 % as it sell medicine to other 135 country. Furthermore, their public health improved so much

Impact on Patent and Research and development

Change in patent policy i.e by increasing its protection many private capital investment companies are ready to help different research institutes by providing financial support. As well as many firms are ready to invest their obtained income in innovation. This solving problem of needs with new technology at lesser cost due continuous innovation and healthy competition. These increasing importance of innovation are leads to develop knowledge based economy. This policy is helpful as create development in skill development

Impact on Foreign Direct Investment

Many big industry will feel safe to invest in country which are following TRIPS regulation as their Intellectual Property will remain safe. Suppose one industry wish to produce product in Developing country or Less developing country as that company can manufacture product in low cost. But to invest in different country investor also need to look other factor such as countries Economy, Its market ,Social Condition, Life style, Skill labours. If these mentioned factors are in favour investing company then chances of investment are high.

For some LDC or Developing country this may create negative impact, as domestic companies of these country which lack skill and completely depends on others research will not able to produce product due to so called protection of IPR. That country need to rely on importing that product at higher cost and will face additional problem of Unemployment

Impact on Traditional Business and small-scale Industry

As with rapid innovation by MNC and rise in trade of IPR with help of TRIPS consumer in Least developing country or developing country will prefer new products having lots of feature, variety, easy to use products. This will highly impact on traditional product business and small-scale industry it also cover people associated with this. As result the difference between rich and poor get increases.

Effect of Article 66.2 in TRIPS AGREEMENT

Article 66.2 of TRIPS Agreement is obligation to developed country about to help least developed country. It does not state how, in which extended, in which field, till when they will help Least developed country. LDC pointed out this this in WTO and implementation of this article takes place in 4 phase from

Phase Description of Work

1995-1998 Not on Agenda In Sept 1997 Bangladesh draw attention to 66.2. But no action taken

1998 -2000 The first report- Developed country define kind of help they can offer only to LDC

2001-2003 Negotiating and monitoring Mechanism

Here Developed country submit which task they will perform for LDC

2003-2016 Stated work shop, training done by developed country, Reports of those come but no feedback from LDC received

Table 1- Process of implementation of article 66.2

There were different program (Incentive) reported during period of (2003- 2016) which are categorized by 16 Category

1) Environment/ Water- related to Climate change and sanitation

2) Public health – This consist of Knowledge related to public health, Capacity building Medicine, and vaccine awareness e.g. Production of genetic epidemiology for Malaria by Japan

3) Intellectual Property- Training courses of IP, Capacity building by Japan to Bangladesh officer

4) Agricultural/ Food- Food security, crop productivity

5) Energy- renewable energy

6) Education- provide education facility to students of LDC by offering Scholarship

7) MSME/Business Course –

8) Financial Resource-

9) Construction/Infrastructure- Construction, engineering knowledge, Funds

10) Aid relief-

11) Information Technology – Different Capacity building program, e.g. – FTF programming for Bangladesh transfer by USA

12) Trade – Transfer of trade related knowledge

13) Mining

14) Manufacturing- Transferring knowledge of know- how, new production technique

15) Metrology/ Standardisation

16) Other

In 2003 number of beneficiary LDC country were 26 but later it found that actual number is 35.

We can conclude that technology transfer under TRIPS is highest is in Environment and water related problem. Transfer of technology in field like Public health, Intellectual property and in agricultural sector is also good while technology transfer in Industrial field like mining, Manufacturing is very low reason may be behind this is Industrial patent, Confidential information, Industrial design all possessed by Industry. It can also be noticed that humans’ basic needs are more concern in this report. One more good thing that importance given Education Sector that this new generation will help to further develop country after end of transit time

It is observed that all reports were received only from developed country, there should be feedback from LDC also as it will helpful to improve Technology Transfer process under incentive as these feedbacks will represent benefits obtained to Least Developed Country

Patent System before TRIPS

After Independence of India several amendments were done by Indian government in act of 1911. In 1970 N. Rajgopal Ayangar headed new comity form new patent rights which was included Process Patent and life span of this patent was for 7 years. As patent protection was valid for only Process Patent , Indian pharmaceutical industry perform Reverse Engineering and develop same product with less research cost.

In same time due to this weak patent system in India its pharmaceutical industry made huge progress. India was one of leading Generic drug producer in the world and production of new expensive drugs with less prize made Indian pharmaceutical leading industry in the world. This hamper market of U.S and European pharmaceutical industry.

After introduction TRIPS agreement by WTO organization for protection of Intellectual Property, India become its member. As India being developing country, India got transition period of 10 years from 1995 to implement policy according to TRIPS agreement. There were pressure from U.S and Australian government to implement Product Patent. In year 2005 i.e at end of transition period.

As introduction of Product patent limited India’s use Reverse Engineering furthermore extension of patent life from 7 years to 20 years, It was predicted that these amendments will create barrier in pharmaceutical industry but this TRIPS Agreement opened several doors to Indian Pharmaceutical industry. Indian government got some tools to fight in case of emergency and rise situation of anticompetitive in market like Compulsory licencing & Parallel Importing.

Impact of TRIPS on Indian Pharmaceutical Industry

1. Spending on Research and Development

It is found that there is increasing tendency of Indian medicine company to invest in research of drugs. It is positive sign that they wish to develop on their own. From 1995ti year 2010 it is found that spending on research by Indian domestic countries is 1.5 to 4 times than foreign companies based in India. It was also find out that disease like Malaria, Dengue which are major concern in Developing and Least developing countries are on main focus. May be lack of trust of foreign companies towards Indian

policy or their less willingness to sharing knowledge about pharmaceutical to Indians

2. Effect on Export and Import of pharmaceutical industry

India was was in good position in last decade due to availability of Reverse engineering while doing this its potential to creating new drugs our own increased. Further investment by domestic companies helps India to become market leader of pharmaceutical industry. It is also observed that there was sudden growth in imports of medicine after implementing Product patent, and with in 2-3 there is fall of import percentage which is good sign for India.

3. Effect on FDI in India

With rise in protection of Intellectual property rights i.e product patent . Increase in foreign investment is observed in pharmaceutical industry. One thing though stuck here that investment of Worlds top 10 Pharmaceutical company’s MNC in India is bellow par

4. Impact on price of drug

As implementation of Product patent give monopoly to patent holder, which gives cause extra charges from customer. One more thing to remain India is developing country and 37% population was bellow poverty line so they were unable to afford any drug. Only 4 % of Indian population has health insurance so remaining pay drugs by their own. Most of these population demands for cheaper cost drugs so it may be patented drug or generic drug it does not matter to them. So there is chances that most demanding patented medicine you will get cheaper here than other part of world.

CONCLUSION OF CASE STUDY

To conclude this case study though there may be little bit loss in Indian Pharmaceutical industry due to TRIPS agreement but India gain a lot and almost made itself self sufficient to design our drugs. Which fulfil motive of TRIPS agreement .i.e To provide protection for IPR and help developing/ Least developed country.

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