The Impact of TRIPs on Third World Countries: A Deep Dive

When India signed onto the World Trade Organization in 1995, it also accepted a binding rulebook that would reshape how knowledge, medicine, and even age-old farming wisdom could be owned. That rulebook is the Agreement on Trade-Related Aspects of Intellectual Property Rights, better known as TRIPs. It set minimum standards of intellectual property protection that every WTO member must follow, regardless of how rich or poor it is. For developing nations, often grouped as the Third World or Global South, this uniform standard has created a complicated legacy. It promised innovation and investment, but it also raised the price of medicines, exposed traditional knowledge to misappropriation, and widened the gap between technology owners and technology seekers. This post unpacks what TRIPs actually means for countries like India and why the debate around it remains so heated.

What TRIPs set out to do 🔗

TRIPs obligates WTO members to offer and enforce minimum standards of protection for virtually all major types of intellectual property rights, including patents, copyrights, trademarks, and trade secrets. Before TRIPs, many developing countries deliberately kept weak patent laws so that local industries could copy and produce essential goods cheaply. India, for example, did not grant product patents on medicines until TRIPs forced a change. The agreement standardised these rules across the globe, which sounds fair on paper. In practice, a single global standard affects a wealthy pharmaceutical giant very differently from a low-income country trying to keep its citizens healthy and fed.

TRIPs and access to healthcare 🔗

The most visible impact of TRIPs has been on the price of medicines. Patents allow pharmaceutical manufacturers to charge prices above marginal cost so they can recover research expenditure and earn a profit. While this incentive may drive innovation, it also means that life-saving drugs can be priced far beyond what an ordinary patient in a developing country can afford. The HIV/AIDS crisis made this painfully clear. With most people living with HIV located in the world’s poorest regions, the prices created by patents directly influenced how many people could access treatment and how many could not.

Before TRIPs, countries like India built thriving generic medicine industries precisely because they did not recognise product patents on drugs. This allowed Indian manufacturers to reverse-engineer patented medicines and sell them at a fraction of the original price, earning India the title of “pharmacy of the developing world.” After the transition period ended, developing countries were required to implement and enforce pharmaceutical product patent protection, which threatened both domestic supplies of low-cost medicines and exports to poorer nations that depended on them.

The Doha Declaration and built-in flexibilities 🔗

The backlash against rising drug prices led to an important correction. At the 2001 WTO Ministerial Conference, developing countries pushed through the Doha Declaration on the TRIPS Agreement and Public Health. It affirmed that the agreement does not and should not prevent members from taking measures to protect public health. The declaration confirmed that countries could legally use certain “flexibilities” built into TRIPs to keep medicines affordable.

The two most important flexibilities are compulsory licensing and parallel importation. Compulsory licensing allows a government to authorise someone other than the patent holder to produce a patented product, usually in a public health emergency, in exchange for reasonable compensation to the patent owner. Parallel importation lets a country buy a patented product from a cheaper market abroad. Studies tracking the use of these tools found that between 2001 and 2016, there were 176 instances of possible use of TRIPS flexibilities by 89 countries, with compulsory licences making up the majority. These flexibilities show that TRIPs is not entirely rigid, but using them requires legal capacity, political will, and the courage to face pressure from powerful trading partners.

India’s Section 3(d) and the Novartis case 🔗

India offers one of the clearest examples of a developing country defending public health within the TRIPs framework. When India amended its patent law to comply with TRIPs, it inserted Section 3(d), a clause designed to prevent “evergreening,” the practice of making minor modifications to an existing drug to extend a patent indefinitely. This clause was tested in the famous Novartis case. The Swiss company sought a patent for a modified form of its cancer drug Glivec, but the Indian Patent Office refused, arguing it was only a modified version of an existing drug and therefore not innovative.

The dispute reached the Supreme Court, which in 2013 ruled that improved bioavailability alone did not demonstrate enhanced therapeutic efficacy, so the drug was not patentable. The price difference at stake was enormous: generic versions cost roughly $175 per patient per month compared to about $2,600 for the branded version. The verdict was widely seen as a victory for public health and as confirmation that India could protect its policy space while staying within global trade rules.

Biopiracy and the threat to traditional knowledge 🔗

The second major implication of TRIPs concerns traditional knowledge. A deep contradiction sits at the heart of the patent system. Patents reward novelty and individual innovation, but traditional knowledge is multigenerational and collective by nature. Knowledge about how a plant heals wounds or repels pests has often been developed and shared across communities for centuries, with no single inventor and no written patent. Under a strict IPR regime, this leaves such knowledge vulnerable to biopiracy, which is the unauthorised extraction of biological resources or traditional knowledge to obtain patents without compensating the original holders.

The turmeric, neem, and basmati cases 🔗

India has lived through several landmark biopiracy disputes. In 1995, the US Patent and Trademark Office granted a patent to two researchers for using turmeric to heal wounds, a remedy used in Indian households for generations. The Council of Scientific and Industrial Research challenged it by producing references from ancient Sanskrit and Urdu texts, and the patent was revoked because it lacked novelty.

The neem case followed a similar pattern. US and European patents were granted on neem-based fungicides, even though Indian farmers had used the “village pharmacy” tree for centuries. A long opposition, led in part by environmental activist Vandana Shiva’s research foundation, eventually saw the patent overturned. In the basmati case, a Texas company called RiceTec obtained a US patent on rice lines, prompting opposition from India and Pakistan, after which the patent claims were significantly narrowed.

These cases reveal a structural problem. India’s traditional medicinal knowledge exists in local languages such as Sanskrit, Hindi, and Tamil, which are neither accessible nor comprehensible to patent examiners at international patent offices. As a result, examiners abroad could not easily find evidence that the knowledge already existed, so they wrongly granted patents. Fighting each patent afterwards costs years of effort, money, and diplomatic energy.

Economic disparities widened by TRIPs 🔗

The third implication is economic, and it cuts to the core of the North-South divide. The global patent system is heavily skewed toward developed nations, where most patents are filed, owned, and enforced. The majority of patents in pharmaceuticals, biotechnology, and information technology belong to companies in the Global North. This concentration means the rewards of innovation flow disproportionately to a handful of wealthy countries, while developing nations struggle to innovate at the same pace because of high costs and limited technological capacity.

The financial flows tell the story plainly. Developed countries collect the vast majority of global cross-border royalties and licensing fees, while developing countries pay billions in royalties mostly to rights holders abroad. One analysis noted that the benefits of stronger IP protection under TRIPs have been unevenly distributed, with the developed world gaining the most while all countries bear the transaction costs. In other words, poorer nations took on the expenses of building IP enforcement systems without receiving a proportionate share of the gains.

The broken promise of technology transfer 🔗

During the Uruguay Round negotiations, developed countries argued that stronger intellectual property protection would promote increased flows of technology to the South. This was meant to help narrow the development gap. TRIPs even contains Article 66.2, which places a legal obligation on developed countries to provide incentives for technology transfer to least-developed countries.

In reality, this promise has largely gone unfulfilled. The disparity is especially stark in climate solutions. Recent studies show that the Global North holds patents for almost all environmentally sound technologies, leaving developing countries dependent on the North to access tools needed to fight climate change. Strong patent protection, rather than encouraging open transfer, can lock away the very technologies that poorer nations most urgently need.

Strategies for adaptation 🔗

Despite these pressures, developing countries are not powerless. Several practical strategies have emerged to protect their interests within and around the TRIPs framework.

Using TRIPs flexibilities fully 🔗

The first strategy is to make full use of the legal flexibilities the agreement already permits. As discussed earlier, compulsory licensing, government use, parallel imports, and carefully designed price controls can all mitigate the detrimental impact of patent provisions on access to medicines. The right to use these tools was reaffirmed at the WTO in 2001, yet many countries have not written them fully into national law. Building the legal and administrative capacity to deploy these flexibilities quickly is one of the most direct forms of protection a developing nation can adopt.

Strict patentability standards to prevent evergreening 🔗

India’s Section 3(d) demonstrates how a country can set higher thresholds for what counts as a genuine invention. By requiring proof of enhanced therapeutic efficacy before granting a patent on a modified drug, India closed a loophole that allowed companies to extend monopolies indefinitely. Other developing countries can adopt similar standards to keep generic competition alive and medicine prices low.

Documenting traditional knowledge 🔗

To fight biopiracy, the most powerful tool has been documentation. After the turmeric and neem cases, India built the Traditional Knowledge Digital Library (TKDL), which translates ancient texts on Ayurveda, Siddha, Unani, and Yoga into several international languages so that patent examiners worldwide can find prior art. The TKDL has become a global benchmark in traditional knowledge protection, preventing the erroneous grant of patents before costly legal battles even begin.

Domestic laws and benefit-sharing 🔗

National legislation provides a further layer of defence. India enacted laws requiring prior approval before anyone seeks intellectual property based on Indian biological resources, alongside protections for farmers’ rights over seeds and plant varieties. Geographical Indication tags, like the one secured for Darjeeling tea, also protect products tied to a specific region from being claimed elsewhere. Together with international efforts such as the 2024 WIPO treaty requiring disclosure of the origin of genetic resources, these measures help ensure that communities are recognised and, where possible, compensated for their knowledge.

Collective bargaining and South-South cooperation 🔗

Finally, developing countries gain strength in numbers. The Doha Declaration itself was the product of developing countries acting together to push back against an overly rigid reading of TRIPs. Coordinated negotiation, shared generic production capacity, and joint research investment allow Third World nations to resist pressure that no single country could withstand alone. Increasing public funding for research on diseases that mainly affect poorer populations, an area the market and TRIPs largely ignore, is another part of building genuine self-reliance.

What do you think? Does a single global standard for intellectual property treat unequal economies fairly, or should the rules bend more for countries still building their industrial and scientific capacity? And how should the world balance the need to reward innovation against the right of communities to control knowledge their ancestors created?

References

1. https://www.sciencedirect.com/science/article/abs/pii/S0022199619301011
2. https://sur.conectas.org/en/trips-agreement-access-drugs-developing-countries/
3. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1924420
4. https://www.iatp.org/sites/default/files/Implications_of_the_Doha_Declaration_on_the_TR.htm
5. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5840629/
6. https://link.springer.com/article/10.1186/1744-8603-10-3
7. https://blog.ipleaders.in/analysis-novartis-g-vs-union-india/
8. https://www.ipandlegalfilings.com/the-turmeric-latte-traditional-knowledge-unpacking-biopiracy/
9. https://www.mondaq.com/india/patent/586384/traditional-knowledge-and-patent-issues-an-overview-of-turmeric-basmati-neem-cases
10. https://sociology.institute/sociology-of-development/trips-consequences-developing-nations/
11. https://www.wto.org/english/tratop_e/trips_e/colloquium_papers_e/2019/chapter_9_2019_e.pdf
12. https://www.cambridge.org/core/books/abs/international-public-goods-and-transfer-of-technology-under-a-globalized-intellectual-property-regime/can-the-trips-agreement-foster-technology-transfer-to-developing-countries/0D2545234CFD706AFC2268F4DA2B7DE2
13. https://www.wto.org/english/res_e/reser_e/ersd201801_e.pdf
14. https://jindalforinteconlaws.in/2024/02/29/transfer-of-environmentally-sound-technologies-analysing-the-challenges-under-the-trips-patent-regime/
15. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5840632/