The July 23, 1990 draft of the TRIPS Agreement contained the following proposal to deal with trade in counterfeit and pirated goods.


1. Preamble
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1B.1 Desirous of providing for adequate procedures and remedies to discourage international trade in counterfeit and
pirated goods while ensuring an unimpeded flow of trade in legitimate goods;

1B.2 Deeming it highly desirable to ensure competition in international trade and to prevent arrangements which may
restrain such competition;

1B.3 Recognizing the need to take into consideration the public policy objectives underlying national systems for the
protection of intellectual property, including developmental and technological objectives;

1B.4 Recognizing also the special needs of the least developed countries in respect of maximum flexibility in the
application of this Agreement in order to enable them to create a sound and viable technological base.

2. Objectives

2B With respect to intellectual property and international trade, PARTIES agree on the following objectives:

(i) To clarify GATT provisions related to the effects of the enforcement of intellectual property rights on
international trade, in particular articles IX and XX(d), and to provide for adequate procedures and
remedies to discourage international trade in counterfeit and pirated goods.

(ii) To ensure that such procedures and remedies do not themselves become barriers to legitimate trade and
are not applied in a discriminatory manner to imported goods.

(iii)To ensure free flow of goods and prevent arrangements, effected by private or public commercial
enterprises, which may result in the division of markets or otherwise restrain competition, thus having
harmful effects on international trade.


3. Trade in Counterfeit and Pirated Goods

3B.1 PARTIES undertake to discourage trade in counterfeit and pirated goods and to combat such trade without
inhibiting the free flow of legitimate trade. For this purpose, PARTIES shall exchange information and promote

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cooperation between customs authorities with respect to trade in counterfeit and pirated goods. They shall also
adopt in their respective national legislation the necessary measures, procedures and remedies in this respect.

3B.2 For the purposes of this Agreement, trade in counterfeit goods means trade in goods which infringe a trademark
validly registered in respect of such goods in the importing country, while trade in pirated goods means trade in
goods which constitute a slavish copy of a work protected by copyright under the legislation of the country of

4. Safeguard against Creation of Trade Impediments in the Application of Measures and Procedures to
Enforce Intellectual Property Rights

4B In the application of national measures and procedures to enforce intellectual property rights, PARTIES
undertake to avoid the creation of impediments or distortions to international trade, and to refrain from applying
their national legislation in a discriminatory manner to imports from the territories of other PARTIES. For this
purpose, they shall observe the principles of national treatment and MFN enshrined in the GATT.

5. Non-recourse to Unilateral Measures

5B PARTIES shall refrain, in relation to each other, from threatening or having recourse to unilaterally decided
economic measures of any kind aimed at ensuring the enforcement of intellectual property rights.

6. Control of Anti-competitive and Trade-distorting Practices

6B PARTIES shall co-operate with each other to ensure the free flow of goods and prevent that intellectual
property rights are used, through arrangements among enterprises, to create restrictions or distortions to
international trade or to engage in anti-competitive practices having adverse effects on their trade. For this
purpose, they undertake to exchange information and to agree upon the request of any other PARTY to consult
with respect to any such practices and to take such measures in their territory as may be deemed appropriate
with a view to eliminating the adverse effects of such practices.

7. Transparency

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7B Laws, regulations, judicial decisions and administrative rulings pertaining to the application of the principles
and norms prescribed in points 2 to 5 shall be made publicly available in the official language of the Party
adopting such texts and, shall be provided, upon request, to any other Party.

8. Suspension of Customs Clearance

8B PARTIES shall adopt the necessary measures and procedures, whether judicial or administrative, to enable
intellectual property right holders, who may have valid grounds for suspecting that imported goods infringe
their trademark or constitute a slavish copy of a work protected by copyright in accordance with the national
legislation of the importing country, to obtain the suspension by the customs authorities of clearance from
customs of such goods. Such suspension shall be for a limited period of time pending a determination by the
competent authorities whether the goods are infringing.

8A (See point 15A of Part IV above).

9. Safeguards against Obstacles to Legitimate Trade

9B (i) Persons initiating the procedure for the suspension of clearance from customs shall be required to provide
adequate documentary evidence to satisfy the competent authorities that prima facie there is an infringement of
their right to protection in accordance with the relevant laws of the country of importation.

(ii) Such persons shall also be required to provide security by bond or deposit of money in an amount sufficient
to indemnify the authorities or to hold the importer harmless from loss or damage resulting from the action

(iii) The importers of such goods or other persons affected by the procedure shall be informed promptly of
actions taken and shall be entitled to a judicial review of any final decision taken by an administrative authority.

9A (See points 16A, 17A and 18A of Part IV above).

10. Disposal of Infringing Goods

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10B Where it is finally determined that the goods are infringing in accordance with the relevant laws of the
importing country, the competent authorities shall provide for the forfeiture, destruction or disposal of the goods
in a manner not prejudicial to the interests of the right holder.

10A (See point 22 of Part IV above).

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