W.T.O. & CANCUN CONFERENCE

OVERVIEW :

The Words Trade Organisation  (W.T,O.)

The genesis of Word Trade Organisation (WTO) can be traced to the General Agreement on Tariffs and Trade (GATT) which was formed in 1948 by 23 countries including India. The 8th rounds of talks under (GATT) (1986-94), known as Uruguay Round, led to the birth of WTO on 1 st January 1995. Till then, GATT covered issues related to trade in goods. The Uruguay Round, however, added new Agreement viz; General Agreement on Trade in services (GATS) and Agreements on Trade Related Aspects of Intellectual Property Rights (TRIPS). All the three major agreement alongwith their associate agreement, now rest under the umbrellas organisation – WTO.

The GATT has been the only multilateral body (constituting many nations) around, from 1948 to 1994 that provided rules for much of the world trade. The contracting parties (Nations) of GATT continuously expanded the area and scope of the rules during the successive trade rounds.

Not only all the original articles of GATT were up for review, but virtually every outstanding policy issue like trade in services, Intellectual Property thither to not deal with GATT), reform in Trade in textiles and agriculture etc. were encompassed by the Uruguay Rounds of  negotiations The differences among the nations on various issues were so actuate that the round failed several times during these 8 years. Mr. Arthur Dunkal, the then Director General of GATT, presented a compromise draft ' Final Act' , which became the basis for the final agreement Finally, on 15th April, 1994 the Agreement was signed by the Ministers of almost all the participating countries representing their governments at Marrakesh, (Morocco). At last The World Trade Organisation (WTO) is the only international' body dealing with the rules of trade between nations.

At its heart are the WTO agreements, negotiated and signed by the bulk of the world's trading nations. These documents provide the legal ground rules for intentional commerce. They are essentially contracts, binding governments to keep their trade policies within agreed limits. Although negotiated and signed by governments the goal is to help producers of goods and services exporters and importers conduct their business.

Purpose:

There are three main its purposes.

The systems over riding purpose is to help trade flows as freely as possible so long as there are no undesirable side effects. That partly means removing obstacles. It also means ensuring that individuals, companies and govemments know what the trade rules are around the world and giving them the confidence that there will be no sudden changes of policy. In other words, the rules have to be ' transparent" and predictable. Because the agreements are drafted and signed by the community of trading nations. Often after considerable debate and controversy, one of the WTO's most important functions is to serve as a forum for trade negotiation.

A third important side to the WTO's work is dispute settlement.

Legal Texts : The WTO Agreements –

A summary of the final act of the Uruguay Round –

¨       Introduction

¨       Agreements Establing the WTO

¨       General Agreement on Tariffs and Trade 1994.

¨       Uruguay Round Protocol Gatt 1994.

¨       Agreement on Agriculture

¨       Agreement on sanitary and phyto sanitary measures

¨       Decision on measures concerning the possible negative effect of the reform programme on least developed and not food importing development countries

¨       Agreement on textile and clothing

¨       Agreement on technical Barriers to trade

¨       Agreement on trade related investment measures

¨       Agreement on implementation of Article VI-C (Anti Dumping)

¨       Agreement on implementation of Article VII (Customs Valuation)

¨       Agreement on preshipment Inspection

¨       Agreement on Rules of origin.

¨       Agreement on import licensing procedures

¨       Agreement on subsidies and counter vailing measures.

¨       Agreement on safe guards.

¨       General Agreement on trade in services

¨       Agreements on Trade related Aspects of Intellectual property right, including trade in counterpart goods

¨       Understanding on rules and procedures governing the settlement of disputes.

¨       Decision of achieving greater coherence in global Economic Policy-making..

A.      HlgheetAuthority:

Ministerial Conference comprising the designated Ministers of the member nations, is the supreme decision making forum. The ministers meet at least once in two years. The Ministerial conference can take decisions on 'All matters', under any of the multilateral agreements.

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B.      Second Level:

Day to day work is handled by the General Council, which also acts as 'The disputes settlement body' and ‘The Trade Policy Review body'. The General Council acts on behalf of Ministerial conference and meets under these three different terms of reference.

C.      Third Level :

Three more Councils, each handling a different broad area of trade, report to the General Council. The council for trade in goods (overseeing GATT), the council for services (overseeing GATS) and council for TRIPS (overseeing trips)

D.      Fourth Level :

Each of higher level councils has subsidiary bodies. The goods council for example, has 11

committees dealing with specific subjects such as agriculture, subsidies etc.

Functions of WTO:

The WTO is the umbrella Organisation responsible for over seeing implementation of all agreements multilateral (signed by all WTO members) and plurilateral (signed by a group of members for specific issues) that have been negotiated under Uruguay Round or will be negotiated in future. Secondly, it is to provide a forum for further negotiation on matters covered by the agreements as well as on new issues. Thirdly, it is responsible for settlement of disputes

among member nations. Fourthly, it is responsible for periodic reviews of the trade policies of the member nations. Details and clear guidelines have been provided in the WTO agreement. On carrying out of these functions as disputes settlement body or applellate body, trade review body, implementation of reports, issues of compliance, etc.

Cancun Ministerial Meeting:

The latest round of trade talks was held at'Cancun' in Mexico from 10 -14 September, 2003 in the Chairmanship of the Ministerial Conference, Mexico Foreign Minsiter Luis Ernesto Dervez where trade ministers from almost all countries in the world coverage. Officially called the 'Fifth Ministerial Meeting of the world Trade Organisation (WTO) the Cancun talks focus two key issues - agriculture and investment. The WTO's Trade negotiating Committee on Goods has proposed reductions in subsidies to farmers by member countries as these depressed food prices globally and result in developing countries being unable to compete on equal terms. Cancun Summit is tearing on the verge of failure with the influential developed countries pressing ahead with negotiations on the 'Singapore Issues' and referring to make any significant concessions on agriculture.

What triggered off such gloom was the second draft declaration of the summit (the first one had been drafted at Geneva earlier) presented to the conference by Mr. De/vet, after taking in to account the reports of the six facilitation groups that had been set up to arrange a meeting of ways on different themes. This second draft failed to take into account any of the major developing country concerns voiced by India and like minded others. The procedure now is to first discuss the draft in a meeting of the heads of delegation, then start a green-room process. Many nations that are members of WTO felt that for international trade to be genuinely free and fair, these issues would to be incorporated. As for Government procurement to take just one example of how it effects trade, if a government offers an incentive for the level of indigensation in  procuting a good that clearly would effect trade ‘Here again, there is a plurilateral agreement, involving 28 countries, but the attempt is to reach an agreement between all 146 member countries of the WTO trade facilitation refers essentially to simplifying procedural hassles in international trade, in terms of the documentation required by customs departments and so on, obviously this too has an impact on trade.

The EU, Japan and South Korea were the ones that first pushed for the Singapore issues in 1996 and to varying degrees most of the developed world has gone along with them. India and other developing countries, on the other hand, are cautious about taking up these issues for negotiations.

On issues like investment and competition policy, India feels that having multilateral agreements would be a serious impingement on the sovereign rights of countries. This is India's objection to the Singapore issues. To an extent of course, this is inherent in any multilateral treaty, but investment is seen as an area in which ceding sovereign rights would leave governments, particularly developing country governments, with two little room for manoeuvre in

directing investments in to area's of national priority.

On the issue of transparency in Government procurement, the Indian position is that while principal is entirely acceptable, there can not be a universal determination of what constitutes transparent procedures. On trade facilitation, India has argued that once again while the idea is unexceptionable, developing countries may not have the resources by way of Technology or otherwise to bring their procedures in line with these in the developed world over the short to medium term. On the specific issues of competition policy as applicable to the "hard core cartels" India has pointed out that there is no clarity on whether these would include export cartels Organisation of Petroleum Exporting Countries (OPEC) is perhaps the best known example of an export cartel, that rigs prices by fixing production ceilings.

As of now, there is no formal decision on whether or not there will negotiations under the aegies of the WTO on these issues. Indication from Cancun are that thus pushing for their inclusion are using other areas like agriculture as leverage to persuade the developing countries in to agreeing to negotiate on these areas.

On the other hand the developed west wants countries like India to agree to reduce custom duties on farm importers sharply so that they can sell more farm produce in these markets. India is willing to cut customs duty but in a staggered mannered so that Indian farmers do not Suddenly have to face a flood of cheap imports India is supported in its causes by 20 there countries including China, Brazil, south Africa and Egypt. The group is also supported by the Calms group of 18 countries, led by Australia including New Zealand, Uruguay, and Paraguay on others.

The two groups have zeroed in on common points to push for joining forces for faster reforms by the US and the European Union. According to bath groups, the $300 billion annual subsidies to farmers in these countries is the single biggest reason for distoring would trade.

The failure of the Cancun WTO Ministerial had its genesis in the insincerity of the of the developed countries interpretation of the language of the Doha Declaration. And also in the drafting failures of the text of the draft ministerial Declaration circulated on September 13, 2003. This draft reflected two alternatives text on the Singapore Issue. One reflected the views of those who wanted a Launch of the Singapore Issue and the other reflected the views of those who were opposed to that.

Thus, the boldness of G-21 leads by India, the Cancun Ministerial Conference breakdown. This is the result or strong willingness. According to Indian Union Commerce Minister Shri Arun Jeitley 'WTO after all, has neither a church nor a temple, but a market." So after this it is a word Trading Organisation. Now we can think about WTO that India can win the WTO definitely and lead to the developing countries in international forum.

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INTELLECTUAL PROPERTY RIGHTS

Understanding the importance of intellectual property system and using its effectively as an integral part of business strategy is crucial to success in the market place. Businesses need the intellectual property system to protect manufacturing secrets or other useful information to remain ahead of the competition. Businesses need to fully exploit their intellectual property assets to maintain consistent quality and market products and services to consumers to develop long-term customer loyalty.

To remain ahead of competitors, business entities must either continuously introduce radically new products and services or make small improvements to the quality of existing products and services. Changes are also made in response to customer needs; therefore almost every product or service used in daily life gradually evolves as a result of a series of big or small innovations, such as changes in design or improvements in a product's look and function. Businesses are also concerned with maintaining consistent quality and marketing products and services to consumers. Knowledge, both original and new, is essential to all of these processes.

The intellectual property system is the primary key to successful management of such knowledge assets for business. The main types of intellectual property rights are (1) patents (for inventions), (2) trademarks, (3) industrial designs, (4) valuable undisclosed information or trade secrets, and (5) copyright and related or neighboring rights.

INTELLECTUAL PROPERTY ASSETS AND PROFITABILITY :

Any industry or business, whether traditional or modern, regardless of what product or service it produces or provides, is likely to regularly use intellectual property to prevent others from encroaching on its due reward or taking advantage of its goodwill in the market place. Every industry or business should systematically take the steps required for identifying, protecting, and managing its intellectual property assets, so as to gain the best possible commercial results from its ownership.

If a business or industrial enterprise is intending to use an intellectual property asset belonging to someone else, it should consider buying it or acquiring the rights to use it by taking a license in order to avoid disputes and consequent expensive litigation. A business or industry could encounter legal problems for inadvertently violating the intellectual property rights of others out of sheer ignorance of the intellectual property system. Hence, a basic understanding of the intellectual property system has become a prerequisite for success in the marketplace. Every industry or business needs a trade name and often one or more trademarks for advertising and marketing its products or services. In choosing or creating a new trade name or trademark a business must take great care in not getting into conflict with other business or industrial enterprises which may already be using, and have legal a rights over, identical or deceptively similar trade names or trademarks. After a proper search, and selection, a business should consider protecting its trade name and trademarks.

Most enterprises have valuable confidential business information, from customers; lists to sales tactics that they may wish to protect. Many may also have created original designs or produced, or assisted in the publication, dissemination or retailing of a copyrighted work. Some may have invented or improved a product or service.

In all such cases, the enterprise should consider how best to use the intellectual property system to its own benefit, and at the least possible cost.  It is worth remembering that IP assets may assist an enterprise in almost every aspect of its business development and competitive strategy: from product development to product design, from service delivery to marketing, and from raising financial resources to exporting or expanding its business abroad through licensing or franchising.

PATENTS :

The pace of innovation & progress has accelerated to the point that we find ourselves surrounded by new products & services and we can no longer keep up with all the developments and innovations in our marketplace. However, generating innovations is one thing, preventing others from free riding on the fruits of one's innovative output is an entirely different matter.

"The protection attorded by Intellectual property law is very Important to those business investing in R & D in order to bring new products In to the marketplace. Without this barrier, Innovation is like a crop in an fenced field, free to be grazed by competitors who have made no contribution to its cultivation".

The rewards of successfully commercializing an innovation can be enormous, provided that the new or original knowledge embodied in a product is not freely copied by unscrupulous competitors. The patent system plays a key e in achieving this objective. Patent owners can stop others from using their ideas, or permit such use on payment a one time fee or a recurring royalty. A patent prevents others from making, using, selling or exporting an invention,

Id from using a patented process, generally for up to 20 years.

Small businesses use their patents not only to hold off competitors, but also to attract investors. A strong patent ,position can be the most valuable asset of a small, technology-based company. Patents in such business are not only a source of underlying strength, but also a useful instrument for marketing new products and the new enterprise itself as a good candidate for acquisition by a large company.

TRADE MARK IN MARKETING :

Marketing & innovation are two basic functions, which guide the underlying desire of a business to make a monetary profit in the process of providing quality products and services to customers. Intellectual property plays a ,le in both of these functions, and specifically trade marks are of primary importance in the marketing process.

To develop trust, confidence and loyalty in its products, every business has to develop & maintain a distinct identity or reputation. Businesses achieve this mostly through a distinctive trade name and one or more trade marks. Strong brands/trade marks and successful branding generally refers to success in terms of contribution to market hare, sales, profit margins, loyalty and market awareness.

The value of brands varies from 10 to 90% across sectors of the economy. As such, trade marks/brands are extremely valuable assets, which need careful handling, care, nurturing and protection; otherwise they may loose value, be stolen or simply be destroyed or lost..

Trade Secrets :

All business have trade secrets. A growing number of successful enterprises realizes that valuable information or knowledge is what gives them an edge on the competition. Original confidential information, knowledge & expertise provide a unique competitive quality that help businesses attract customers.

A trade secrets is Information of any type that is actually or potentially valuable to its owner and not generally known or readily ascertainable by the public, and which the owner has made reasonable efforts to keep secret.

The secret information is considered intellectual property frequently referred to as Trade Secrets and often protected by legislation. Today's business environment has increased the importance of trade secrets protection for business by developing and implementing information protection practices. Technology is changing so rapidly that trade secret protection is, in some cases, the most attractive, effective and readily available intellectual property right. Trade Secrets can be valuable to a Company's growth and competitive advantage and sometimes even its  survival. products and processes that are not patentable can be protected under trade secret law. However, enterprises rely on trade secret law, which do not require registration, to safeguard the details of R & D.

DESIGN :

The appearance of an article certainly counts in making a first impression on a customer, and often plays an decisive role in Re final decision to buy or not. Design makes a critical contribution to overall corporate business strategy and success. Effective use of design adds value to a product by creating variety  in a world of commodities. Attractive designs help in differentiating between competing products and also in customizing and segmenting the market for a particular product.

Diligent design management requires cost effective protection of valuable designs to prevent the look of the product from becoming a commodity and freely imitated in less expensive look - alike products. This entails timely registration of new designs at national or regional design office.

The term "design", "industrial design" or "design patent', when used in intellectual property law and practice, refer to the Visual Appeal of a finished article made by hand tool or machine, as opposed to functional features which may be protected by other types of intellectual property rights.

Good design strategy must compare the various alternatives for protecting industrial designs, as there are different legal ways to prevent unscrupulous competitors from unauthorized copying. Most countries require registration of an industrial design as a condition for protection. Registration gives an absolute right that excludes all others from using the design of making, importing for trade or business or selling any article in respect to which the design is registered.

COLLECTIVE & CERTIFICATION MARKS :

Obtaining consumer recognition and customer loyalty is an arduous task for small and medium enterprises (SMEs), which requires a significant investment that may exceed the budget of many firms. So what option do they have?.

"If you can't beat them, join them" the old saying goes. Otherwise also "One of the greatest challenges for small & medium enterprises is not so much their size but their isolation". Working collectively, SMEs can benefit from the advantages of being relatively small while at the same time taking advantage of collective strengths and they can also benefit from economics of scale and broader brand name recognition in the same manner as larger companies.

Under the intellectual property law of most countries, there are provisions on the protection of Collective Marks. These are usually defined as signs that distinguish the geographical origin, material, mode of manufacture or other common characteristics of goods or services of different enterprises using the collective mark. The owner may be either an association of which those enterprises are members or any other entity, including a public institution or a cooperative. Products from a distinct geographical origin may be marketed under collective marks and, in many countries, under Geographical indications. Possible Indian Geographical indications are Agra Petha, Basmati Rice, Darjeeling Tea, Banarasi Sari, Kolhapur Chappal, Nagpur Orange, Bikaneri Bhujia etc.

The main difference between collective marks & certification marks is that the former may only be used by a specific group of enterprises. These marks may therefore, represent useful instruments for SMEs, assisted them to overcome some of the challenges associated with their small size and isolation in the market place.

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PATENT SYSTEM IN INDIA

The basic objective of a patent system is to provide protection & incentives to genuine inventors. This in turn encourages inventions, technological & industrial advancements, which are the pillars of economic development. If an inventor is not awarded with the patent for his invention, he will not be able to get benefits of commercialization or otherwise, of his invention, as any body can copy his invention and exploit it.

Definition & Governing Laws

A patent is a grant from the Government, which confers on the grantee for a limited period of time the exclusive privilege of making, selling and using invention for which a patent has been granted and also of authorizing others to do so on his behalf.

The patents in India are governed under the following laws:

i) The Patent Act 1970          :   It has been amended and effective from 1^st January, 95.

ii)The Patent Rules 1972       :   It has also been amended and effective from 2^nd  June, 99.

A patent granted under the above act and rule confers upon the patentee where the patent is for an article or a substance, the exclusive right by himself, his agents or licensees to make, use, exercise, sell or distribute such article or substance in India and where the patent is for a method or process of manufacturing an article or substance, the exclusive right by himself, his agents or licensees to use or exercise the method or process in India. The patents granted under the act are operative in the whole of India.

Type of Patent :

Under the Patent Act three kinds of patents are granted

            i)         Ordinary Patent

          ii)         Patent of Addition : It is for improvement in or modification of an invention for which invention a patent has already been applied for or granted.

         iii)         Convention : A patent to the applicant from a convention country based on an application made in convention country. The convention application has to make within one year from the date of the first application made in a convention country in respect of that invention.

International/ Global Patent :

There is no International or Global patent. An inventor has to file an application in the country, where he desires to protect his invention. There are regional and/or international treaties to facilitate the procedure to seek protection like patent Go-operative Treaty, European Patent Convention (EPC) etc.

What may be patented :

            i)         Any new and useful art, process, method or manner of manufacture;

          ii)         Any new and useful machine, apparatus or other article;

         iii)         Any new and useful substance produced by manufacture, and includes any new and useful improvement of any of them and an alleged invention.

What may not be patented:

        i)             An invention which is frivolous or which claims anything obviously contrary to well established natural laws;

       ii)            An invention the primary or intended use of which would be contrary to law or morality or injurious to public health;

       iii)           The mere discovery of an scientific principle or the formulation of an abstract theory;

       iv)            The mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant;

        v)            A substance obtained by a mere admixture resulting only inthe aggregation of the properties of the components thereof or a process for producing such substance;

       vi)            The mere arrangement or rearrangement or duplication of known devices each functioning independently of one another in a known way;

      vii)           A method or process of testing applicable during the process of manufacture for rendering the machine, apparatus or other equipment more efficient or for the improvement or restoration of the existing machine, apparatus or another equipment or for the improvement or control of manufacture;

     viii)          A method of agriculture or horticulture;

      ix)           No patent is granted in respect of invention relating to Atomic energy falling within sub section (1) of Section 20 of the Atomic Energy Act, 1962.

Date and Term of Patent:

A patent granted under the Act shall be dated as of the date on which the complete specification was filed subjecting to the provisions of the act.

Subject to the payment of prescribed renewal fee within the prescribed period, the term of every patent granted shall be as follows:

a)       In case if an invention claming process or manugacturing ;method for a substance Intended fa use as food, or as a machine or drug be 5 years from the date of sealing of the patent or 7 years from the date of the patent whichever period is shorter.

b)       In case of any other invention be 14 years from the date of patent.

Who can apply:

      i)               An application for an ordinary Patent for an invention may be made by any person, whether a Citizen of India or not, claiming to be the true and first inventor of the invention or his assignee. The first importer of an invention into India or the first communicator of an invention from outside Indian can not be considered as the ‘true and first inventor'. A company or a firm can not be named as the 'true and first inventor'. The term 'person' includes the Government.

     ii)               An application for a Patent of Addition may be made only by the applicant form original patent to which it is an addition, if the application for the main patent is pending' or by the patentee of such main patent, if it has been granted.

   iii)               A convention application may be made by any person who has made an application for a patent in respect of that invention in a convention country or by his assignee or his legal representative.

    iv)               Application may be made, either alone or jointly with another, by the inventor, assignee, legal representative of deceased inventor or assignee. The inventor is entitled to be mentioned in the patent if he applies to do so.

Where to file the Application:

The application should be filed according to the territorial limits where the applicant for a patent normally reside, or has domicile or has a place of business or the place from where the invention actually originated The territorial limits of the patent offices in India along with addresses are given below:

Document required for filling an application :

The following documents are required for filing an application for a Patent.

a)       An application made in the prescribed form in triplicate; having an address for service in India only.

b)       A provisional specification or a complete specification drawn up in the prescribed Form - 2 alongwith drawings if any. In respect of a convention application, it is necessary to file a complete specification alongwith the application;

c)       A statement and undertaking under Section 8 of the Act in the prescribed Form-8 in duplicate;

d)       An abstract of the invention disclosed in the specification;

e)       In the case of an application made by virtue of an assignment of the right to apply for