International IP Policy

Does One Size Fit All? Balancing Intellectual Property Rights in the Developing World

by Eric Rakestraw

Many international trade organizations, in particular, the World Trade Organization, support the spread of strong intellectual property rights around the globe.  For example, becoming a signatory to the Agreement on Trade-Related Apsects of Intellectual Property Rights (TRIPS) is a requirement for admission into the WTO.

Although the TRIPS agreement in particular has been a source of much controversy, many academics believe that strong intellectual property enforcement – traditionally used as a bargaining chip in negotiations with wealthier nations – actually provides an economic boost for the developing nations themselves.  As one advocate of strong intellectual property rights has noted: “One of the central problems with the criticisms of IP's impact on developing nations is that they focus only on barriers to obtaining products from outside of a developing country, ignoring the benefits that would accrue from promoting innovation within that country.”[1]  It has even been suggested that developing nations should implement stronger intellectual property regimes on their own initiative, as they would provide greater immediate benefits for the developing nation than the minor trade concessions they might be able to negotiate down the road.[2]

But in advocating this viewpoint, the proponents of strong intellectual property protection in the developing world overlook a number of key factors.  First, the world's poorest nations must meet basic needs, such as food, water and government stability, before enforcement of intellectual property rights becomes a viable option.  Second, developing nations have comparative economic advantages in agriculture and manufacturing – in the production of tangible, rather than intangible goods – which do not depend upon strong intellectual property rights.  Third, when nations reach a state of economic development that is amenable to the institution of strong intellectual property protection, the imeptus to act will come from within the nation, rather than from without via an international trade proposal.

In sub-Saharan Aftrica, home to many of the world's poorest nations, hundreds of millions of people struggle to achieve life's basic necessities: food, water and shelter.  For example, in Uganda, the gross per-capita income is only $340 per year.[3]  Entire societies are routinely devastated by drought and famine.  These societies can only dream of achieving what passes for “poverty” in developed countries like the United States.[4]  And this is all true without even considering the impact of AIDS, malaria and other diseases in the developing world.[5]

With respect to intellectual property rights, the practical effect of the poverty epidemic that plagues the world's poorest nations is twofold.  First, until basic survival needs can be reliably provided for, any discussion of stronger intellectual property enforcement is simply unrealistic.  And second, any benefits of providing intellectual property protection to those living in an improverished environment are negligible, and are heavily outweighed by the benefits of free and open access to knowledge.

Given the subsistence agriculture that still pervades many of the world's poorest nations[6], agriculture provides an ideal example to investigate the potential impact of strong intellectual property enforcement.  A number of companies, mostly located in the United States, have in recent decades begun to produce – and patent – varieties of genetically-modified crops.[7]  The number of improvements that can be genetically engineered into plants are virtually limitless; for example, crops that are engineered to resist particular herbicides have met with great commercial success, both in the United States and in Europe.[8]

 As an example, suppose that a company based in the United States creates (and patents) a variety of corn that is particularly resistant to drought.[9]  As is typical for genetically-modified crops, the standard licensing agreement would likely include a prohibition against saving any seeds from one season to the next – they must be re-purchased anew each year.  It is obvious that such a crop would be extremely beneficial to farmers in sub-Saharan Africa, and undoubtedly some of the genetically-modified seeds would make their way to those communities.  The question, then, becomes: would it benefit the developing nation's economy to enforce the seed company's intellectual property rights – effectively denying its farmers the opportunity to use those crops?

Admittedly, such a scenario presents a fairly extreme example of the clash between intellectual property and human rights.  When a government is faced with either respecting the “rights” of a corporate entity half a world away, or potentially saving millions of its own citizens from famine, is there any practical way it could choose the former?  Clearly, then, there are some situations in which the enforcement of intellectual property rights in a developing nation brings more drawbacks than benefits.

In general, the most effective balancing of public and private interests in a developing country will be heavily tilted in favor of open public access.  It is certainly true that human creativity and ingenuity are universal human resources; they are dispersed evenly around the globe, and are present in every country.[10]  But although protecting private intellectual property rights certainly does bring about benefits – in the form of increased innovation – those benefits are nearly irrelevant in a society struggling to cope with widespread poverty, famine and disease.  Instead, the nation's focus should be on enabling its citizens to provide for the most basic needs, those at the base of Maslow's heirarchy: food, water and shelter.  Until those basic necessities are achieved, any potential benefits of strong intellectual property protection would remain unrealized.

The second key point that proponents of strong intellectual property rights overlook is the comparative  advantage enjoyed by developing nations in the areas of manufacturing and agriculture.  Because these industries involve the production of tangible goods, they would receive little benefit from stronger protection of intangible, intellectual property.

For example, Hernando de Soto has attributed many of the troubles in the developing world to a lack of well-defined – and well-enforced – property rights.[11]  And with respect to rights in tangible property, de Soto is undoubtedly correct.  But extending his reasoning to include intangible property rights rests on shakier grounds.  Although there is, without a doubt, underdeveloped intellectual capital in many developing nations,[12] the benefits of instituting strong intellectual property rights during an early stage of national economic development have not been well established.[13]

Although not every wealthy nation followed exactly the same path in their economic development, there are general trends that the development path usually follows.  For example, in the early part of the 20th century the United States had an economy primarily based on manufacturing and agriculture.  Only recently has the U.S. economy shifted to primarily service-based (and therefore more reliant on intellectual property rights).[14]  The manufacturing jobs haves primarily shifted to the more industrialized nations in the developing world – particularly China.

So it is entirely reasonable to expect today's developing nations to follow a similar path – first providing for basic needs, then building an infrastructure of manufacturing and agriculture, followed by the final transition to a service-based economy.  Due to their low cost of labor, today's developing nations have a comparative economic advantage in those areas.  And although manufacturing capabilities require a large initial investment of capital, workers in developing nations are well-equipped to succeed in those jobs.  This stands in contrast to the industries that strong intellectual property rights affect most, such as  information technology, pharmaceuticals, and genetically engineered crops, where a high level of education is usually required to perform any meaningful research or create significant innovation. 

Most importantly, the presence of strong intellectual property laws is not required in a primarily manufacturing-based economy.  Because manufacturing contracts are typically awarded to the lowest bidder, competition in the market will naturally drive competing firms to improve their efficiency.  For example, although China's intellectual property scheme leaves much to be desired (from the perspective of strong IP advocates), its manufacturing economy has continued to increase at a historic rate.[15]

This course of development leads naturally to the third key element that many strong-IP advocates overlook.  As a nation increases its economic development,  the ideal balance between public and private intellecutal property rights shifts further in the direction of the private inventor.  But there is simply no need to pressure less-developed nations into an intellectual property scheme that is unsuitable for their stage of development.

At some point, a nation will become industrialized to the point where stronger intellectual property protection will prove beneficial.  Its government will be stable.  Its judiciary will be effective.  Its people will have food, water and shelter.  And once an effective educational system begins to take hold, the people will begin looking for a way to further increase their status in the world economy – to transition from blue-collar producers of goods (for others) to researchers, scientists and inventors.  And at that point, a scheme of strong intellectual property laws will make sense for that nation. The impetus for change will come from within, rather than from without.

Ultimately, intellecutal property laws are a form of social contract – an arrangement between the creator and the public under which each side stands to gain.  And the goal of any nation should be to find the ideal balance of public and private rights, a balance that effectively promotes innovation while still increasing the availability of knowledge in the public domain.[16]  But it is truly naïve to think that there is a single, perfect scheme of laws which perfectly represents this balance for every society on earth.

Instead, the most effective balance between public and private rights is unique to every society, and will shift and change over time in conjunction with that society's economic development.  International trade agreements, such as TRIPS, attempt to apply a one-size-fits-all approach to intellectual property – an approach that is less than ideal for developing nations.

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[1]    Mark F. Schultz and David B. Walker, How Intellectual Property Became Controversial: NGOs and the New International IP Agenda, 6 Engage 82, 85 (2005).

[2]    Robert M. Sherwood, Global Prospects for the Role of Intellectual Property in Technology Transfer, 42 IDEA 27, 31 (2002).

[3]    United Nations Children's Fund, UNICEF – Uganda – Statistics, http://www.unicef.org/infobycountry/uganda_statistics.html (last visited Sep. 10, 2009).

[4]    In the United States, a family of four is considerd impoverished if its gross yearly income is less than $22,050.  Department of Health and Human Services, 2009 Federal Poverty Guidelines, http://aspe.hhs.gov/poverty/09poverty.shtml (last visited Sep. 10, 2009).  This represents more than 60 times the average yearly income for citizens of Uganda.

[5]    See, e.g., Peter Drahos & John Braithwaite, Information Feudalism 6 (2002) (describing “a future in which a third of 15-year-old boys in some countries will die, in which there are millions of orphans, and where education systems crumble as the teachers die.  In this landscape, hope hides from view.”).

[6]    See, e.g. The World Bank, World Development Report 2008 at 73 (2008), available at http://books.google.com/books?id=MmDiWnqwBnIC (last visited Sep. 10, 2009).

[7]    See generally Monsanto Company, Seeds & Traits, http://www.monsanto.com/products/seeds_traits.asp (last visited Sep. 10, 2009).

[8]    A prominent example is Monsanto's Roundup Ready corn.  See Monsanto Company, Traits in Corn, http://www.monsanto.com/products/seeds_traits/corn.asp (last visited Sep. 10, 2009).

[9]    Crops with this trait are currently under active research and development.  E.g. Monsanto Company, First-generation Drought Tolerant Corn, http://www.monsanto.com/products/pipeline/drought_tolerant_corn.asp (last visited Sep. 10, 2009).

[10]  Schultz and Walker, supra note 1, at 85.

[11]  Hernando de Soto, The Mystery of Capital (2002).  See also Schultz and Walker, supra note 1, at 85.

[12]  Schultz and Walker, supra note 1, at 85.

[13]  Sherwood, supra note 2, at 34.

[14]  See generally J. Thomas McCarthy, Intellectual Property – America's Overlooked Export, 20 U. Dayton L. Rev. 809, 809-810 (1995).

[15]  See, e.g. Zuliu Hu & Mohsin S. Khan, International Monetary Fund, Why is China Growing So Fast? (June 1997), available at http://www.imf.org/EXTERNAL/PUBS/FT/ISSUES8/INDEX.HTM (last visited Sep. 10, 2009).

[16] See Vincent M. Keil, Timothy B. McBride and Eric J. Rakestraw, Gene Challenge Raises Issues Beyond Patent Law, Nat'l L.J., Aug. 17, 2009, at 13 (the proper balance of public and private rights “encourages innovation while maintaining public access to potentially life-saving information”).

HARMONIZING INTERNATIONAL IP POLICY AND ECONOMIC DEVELOPMENT POLICY by Michael Wurl

International IP policy intends to protect innovators and to encourage the dissemination and innovation of technology.  However, there is a global divide between countries that innovate and create new technologies and those who do not.[1]  Looking at the country of origin of U.S. utility patents, ten innovating countries account for almost 94% of those patents taken out in the United States in 2000.[2]  However, the combined population of these countries accounts for only 14% of the world’s population.[3]  The bottom 128 countries, ranked by total patents, only account for 0.75% of all patents taken out in the United States, yet account for 63% of the world’s population.[4]  For example, excluding South Africa, sub-Saharan Africa only produced three patents in 2000; one from Kenya and two from Nigeria.[5] 

            Concerns have been raised that international intellectual property rights policies do not take into account international economic development policy.[6]  This paper explores the divide between international IP Policy and international economic development policy and offers key policy considerations for harmonizing these policy arenas and encouraging innovation and dissemination of technology in developing countries.  Section I will review the economic and policy literature on IP policy and economic development policy.  Here, the literature suggests that IP policy makers ignore the economic reality that there are vast differences between some developing nations and others.  For instance, IP policy is created in a one size fits all fashion for developing nations, but development economists view the developing world as at least two distinct groups; those who diffuse technology but do not innovate and those who are excluded from technology dissemination and innovation altogether.[7]  Section II will consider this disconnect between international IP policy and economic development policy and suggests steps to harmonization.  These steps would harmonize the two policy areas and create necessary distinctions between developing countries like China who primarily diffuse technology and sub-Saharan or other central Asian countries that are essentially excluded from technology diffusion and innovation altogether.

I.                    The Realities of the Economics of the Developing World.

One and a half billion people have extremely limited access to technological

innovation and advancement.[8]  While cell phones and internet access is a limited reality, technology diffusion in almost all of sub-Saharan Africa and large parts of Central and South Asia is very limited.[9]  Further, these countries receive limited foreign direct investment (FDI) outside of the natural resource sectors.[10] 

            Other developing nations have been far more successful at disseminating technology.  These countries include China, India, Mexico, countries in Eastern Europe, and Russia.[11]  The second group of developing countries diffuses technology in three ways.  These developing countries typically have a burgeoning manufacturing economy.  As a result local businesses purchase capital goods to assist in the manufacturing process.[12]  Second, these countries benefit from FDI in manufacturing and high-tech services.[13]  Finally, as these economies develop consumers adopt these technologies for consumer uses, such as cell phones and home computers.[14]  However, these countries do no create new technology; rather they diffuse technology from the developed world.[15]  This group accounts for about three and a half billion people.[16]

            The final groups, technology innovators, come exclusively from the developed world.  The developed countries take part in innovation activities on a large scale and account for almost all of the world’s patents.[17]  These countries have the capital to invest in the creation of new technology, not just the enhancement or use of existing technology. 

            The key to harmonizing international IP policy with international economic development policies lies in the structural differences of countries who diffuse technology and those who are essentially excluded from diffusion and innovation.  In the poorest countries, technology innovation fails along all dimensions, public and private.[18]  The governments of these countries lack the financial resources to invest in science in technology, even on a limited basis.[19] 

This point is particularly salient; even in the United States technology innovation is driven by government expenditures.[20]  While political rhetoric regarding “free markets” and the limited role of government in business and innovation are legend, the reality is that government provides, innovates, and purchases technology on a large scale.[21]  For instance, the United States pharmaceutical industry “would be vastly less productive” without involvement by the United States government.   The FY2003 budget requested over 1% of GNP, or $112 billion, for science and technology.[22]  The National Institutes of Health, NASA, and the Department of Defense are major technology innovators.[23]  The National Science Foundation funds technology research and the government purchases technology on a large scale.[24] 

Without public investment, developing nations, particularly those who fall in the excluded category, have little opportunity to create new or improved technologies.  These excluded countries also lack the necessary economic base to purchase technology for public, private business, or consumer uses. On the other hand, countries in the technology diffusion category have both public and private investments that seek to purchase existing technologies to support their burgeoning manufacturing economies.  Further, because the economies in these countries are robust enough to create some semblance of a middle class, consumers also import household technologies.

Development economists also provide insight into the causes of the innovation divide found within the developing world.  First, technological innovation involves the combination and recombination of resources, monetary capital, and human capital into markets.  In order to be efficient and effective, these markets tend to be centered in world science and technology centers, such as universities and science parks.[25]  As a result, poor countries lose their innovators and scientists to developed countries in a process called “brain drain.”[26]  Some developing countries, like India, Russia, and China, have extensive university systems which may help to stem this brain drain.

Second, technological innovation is a market driven activity.  The poorest countries have very small private markets and public markets are non-existent.[27]  Without adequate investment in technological innovation, there is no reason to expect that the least developed nations will ever provide any meaningful contribution to technological innovation.  Developing countries that diffuse technology have considerably more private and public sector investment in technology but still offer little in the way in the area of innovation.  Rather, these counties are end users of technology but do not typically produce new technologies.  Developed countries include robust public and private investment in technology which allows these countries to create new technology.  Development economists attribute development directly with a nation’s ability to innovate technologically.[28]

Finally, technology is highly ecology-specific.[29]  In other words, technology created in the temperate zones of Europe and the United States may have little relevance to developing countries, which are found primarily in tropical zones throughout the globe.[30]  Further, the ecology of countries that diffuse technology are often more similar to countries that develop technology.  For instance, most of the development in China has occurred along the costal region, which falls into a temperate climate.  However, countries with little diffusion, such as those found in sub-Saharan Africa and central Asia, fall in tropical climate zones.  Technologies that have geographic limitations include agriculture and health, as well as construction materials, infrastructure design, and energy technology.[31]

Despite these clear distinctions found in developing countries, international IP policy does not create major policy distinctions between technology diffusers and those who are excluded from technology markets altogether.  The primary international IP policies in place today presume that strong intellectual property rights will foster technology diffusion and innovation.[32]  Empirical studies have been presented that support the general policy; strong IP rights have in fact fostered technology diffusion and innovation in some developing countries.[33]  However, these studies tend to focus on countries defined as technology diffusers, such as Brazil, Russia, India, and China.[34]  By considering only those countries who diffuse technology and not those who are almost completely excluded from technology markets international IP policy ignores several stark economic realities.

II.                 Harmonizing International IP and Economic Development Policy.

In order to bring IP policy in line with development policy, IP policy must accept

that there are at least three distinct types of countries in the world regarding technology and innovation and that IP policy must consider this economic reality in order to be efficient and effective.  Current IP regimes focus on forcing small, unindustrialized nations to enter into agreements, such as Trade Related Aspects of Intellectual Property Rights (TRIPS).  TRIPS required countries to treat foreign and domestic IP rights the same.[35]  TRIPS encouraged, if not forced, developing countries to enact strong IP regimes in exchange for agricultural consideration.[36]  Further, TRIPS takes a formalistic one-size fits all approach without any regard to countries’ economic status.[37] 

            Here, we have a development regime that seeks to elevate developing countries out of poverty through liberalized markets, including reducing trade barriers, strong property rights, and foreign direct investment.[38]  For countries that disseminate technology, this policy seems to work.  For instance, China benefits greatly from foreign direct investment and reduced trade barriers because of its robust labor and manufacturing markets.  While strong IP rights for foreign inventors in China may hinder some innovation, China receives a great economic benefit because of its dissemination of technology.  Further, by growing economically China sets itself up to become a world technology innovator in the future. 

            However, such policies would make little sense in sub-Saharan Africa.  Most of these countries cannot even afford to disseminate technology, let alone innovate.  The reality of development is that strong IP laws in sub-Saharan Africa would not limit innovation because no innovation occurs there on any discernable scale.  Worse yet, no significant technology dissemination occurs in sub-Saharan Africa.  The conditions there are vastly different than the conditions in China.  While poverty is persistent in both countries, China has a robust economy that supports a large consumer population and provides for investment opportunities in technology, both public and private.

 In sub-Saharan Africa, only small markets exist and these markets have little use or capital for technology.  Further, there is almost no public investment in technology.  Rather, most efforts are directed at survival and meeting basic needs instead of research and development.  The three patents filed from inventors from sub-Saharan Africa, excluding South Africa, in 2000, supports this line of thinking.  People will not spend time, money, and effort into inventing new technologies if they cannot meet their basic needs.  The conditions in Africa are incredibly poor, while the conditions in China, while poor, contain two pre-requisites for innovation and development; a technology infrastructure and demand.   

Harmonizing IP and economic development policy would only require IP policy makers to accept an economic reality; not all developing countries are created equally.  Forcing tough IP laws on developing nations like China makes sense.  China will soon be an innovator.  There is a robust infrastructure in place that not only uses technology, but can also now innovate due to public and private investment.  Developed countries have a good reason to fear that their patents may be infringed; the Chinese, while being notorious for ignoring IP law, have a characteristic that many developing nations do not; they actually have the ability to copy patented technology. 

On the other hand, African nations are highly unlikely to replicate complex inventions, like pharmaceuticals or energy generation technology, because those countries simply lack the ability to replicate sophisticated technology.  Further, strong IP laws in Africa are senseless; no one is inventing any technology in any discernable scale in Africa.  Even if these countries wanted to infringe on a patent, it is highly unlikely that these countries could replicate the technology. 

The poorest nations need something very different from what TRIPS and the current WTO agenda offer.  These countries cannot even afford to participate in technology markets.  There is no investment, public or private, to spur technology dissemination, let alone innovation.  In order for these countries to develop, there must be investment from outside sources.  While TRIPS seems to offer the possibility of some foreign investment, little progress has been made since the inception of TRIPS.  The reality is that these countries sit precariously close to disaster. 

A bifurcated policy that treats developing countries that disseminate technology differently from those who are excluded from technology markets would alleviate many of the problems associated with incongruent IP and development policies.  Here, countries that disseminate technology would be required to adopt strong IP laws in order to protect foreign investors and patents.  However, these countries would be better served if anti-competitive patent techniques were addressed.  International agreements should focus on preventing companies and inventors from suppressing and blocking patents.

Patent suppression, for instance, is a technique where any agreement or conduct limits the availability, use, or development of a particular technology.[39]  Patent blocking occurs when firms try to patent entire process to prevent other firms from entering the market.[40]  This anti-competitive behavior runs afoul of standard principles of capitalism and undoubtedly creates barriers to technology innovation.  Addressing these issues, as well as encouraging continued foreign investment and trade, will benefit developing countries that already disseminate technology on a large scale.  Further, encouraging, or even forcing, these countries to provide strong IP rights to foreign inventors is important because these countries actually have the ability to seriously infringe on foreign patents. 

Developing nations that are excluded from technology markets do not benefit from TRIPS in any meaningful way.  These countries do not innovate or disseminate technology.  Further, they lack the ability to infringe on complex patents.  However, these countries would benefit greatly by increased foreign investment.  One of the major hurdles these countries face is finding the capital to even purchase technology.  The only way this will happen in the near future is if developed or developing countries that disseminate technology begin investing in these excluded countries technology infrastructure.

A number of possibilities exist to encourage technology investment in excluded markets.  First, as Sachs pointed out, technology is often geographic specific.  Encouraging investment in tropical technology requires a robust public and private investment regime.  Many “free market capitalists” contend that government should never invest in the economy.  However, considering the evidence from the American experience with technology innovation, this would be a recipe for disaster.  Technology innovation is a highly risky and expensive proposition that the private market does poorly.  The risk is often too great; existing technologies provide a known quantity, both in terms of cost and effectiveness.  Therefore, private firms typically focus on incremental change rather that dramatic innovation.  Unfortunately, dramatic innovation leads to great economic gains, while incremental innovation is slow and unlikely to produce real innovation.  Here, a state of market failure would exist in many areas without government involvement.  Policy makers must set aside the religious adherence to fictional free market principles and focus instead on empirical evidence that demands strong public sector investment in technology.

In order to fund technology development in countries that are excluded from these markets, foreign governments, either independently or in conjunction with private firms, should begin investing in sub-Saharan countries.  Due to the state of the economies in countries excluded from technology markets, investment in this case would look a little like charity.  Foreign governments could act independently or contract with private firms and not-for profit organizations to develop technologies that would specifically benefit countries excluded from technology markets.  In essence, developed nations would begin creating technologies for the excluded countries, in turn addressing the research and development costs to the creation of technology for excluded countries.

Further, this investment should require that these excluded countries gain access to these new technologies immediately, either through licensing agreements or funding mandates.  The organizations responsible for developing these technologies would receive their funding from other countries with the requirement that these organizations adhere to certain rules to receive funding.  In other words, the governments of developed countries would create new technologies that would be useful for excluded countries, fund that development, and then require that the organizations that received funding to develop these technologies make them available at cost to the excluded countries.  By removing market principles at this early stage, technology that would not be created under standard economic conditions could be created and disseminated because the foreign government investments would essentially create a market.  Organizations would participate because the subsidized market would not only pay for research and development, but also pay for the actual purchase of the technology once invented. 

By seeking investments from foreign governments these countries could create a market for tropical technologies.  Further, grants and other investments should then be provided to the sub-Saharan governments and domestic firms to purchase these new technologies.  Another approach to encouraging technology development where no market exists would include various “prizes,” such as the well known X Prize, offered to firms to create viable commercial space travel.  Finally, every effort should be made to ensure that manufacturing occurs on the African continent or elsewhere in geographic proximity to these developing countries, expanding local manufacturing economies and increasing demand for additional technology. 

The approach that would most benefit excluded countries could best be described as charitable.  No economy exists for these technologies and without some other intervening factor, no market will likely emerge.  However, by providing strong investment by foreign governments, which includes many strings to ensure that the technology actually gets disseminated, a viable market for tropical technology and technology dissemination in excluded countries could be created.

Until excluded countries actual participate in the technology market IP rights are irrelevant.  These countries desperately need technology but lack the resources to disseminate the technology, let alone actual innovate in these areas.  Until these countries can at least disseminate technology, they will lack the basic capacity to innovate in any meaningful way.  This is due to the high cost to technological innovation.  Further, concerns that these excluded countries will somehow infringe on foreign patents, which will ultimately cause losses to technology firms in developed countries, lacks merit.   Excluded countries lack the capacity to duplicate sophisticated technologies on a large scale.  Further, it is unlikely that these excluded countries would be able to sell the duplicated technology outside of the developing world, meaning that there would be no lost sales, only pirated technology sold to consumers who would not purchase the technology absent the infringement.  Once these excluded countries actual enter the technology market, the next step would be to ensure that these countries adopt strong IP rights.  Until then, the concerns of developed countries are unfounded and the IP policies have little relevance.

International IP policy can be harmonized with development policy by simply accepting the economic reality that there are two types of developing countries; those that disseminate technology and may be able to create some technology and those who are completely excluded from the technology marketplace.  The current IP policies do not appear to harm countries that disseminate technology.  Empirical studies suggest that strong IP rights benefit the economies of these countries by encouraging foreign investment and trade. 

However, countries excluded from technology markets do not benefit from strong IP protections because there is no foreign investment, no indication that foreign investment is forthcoming, and no market in these countries for technology dissemination or innovation.  Sadly, these countries current economic state prevent them from entering the technology market.  Unfortunately, technological innovation may very well be the driving force behind economic development.  The only way this will change is if developed and developing countries who participate in technology markets invest in these excluded countries.  Further, any investment must result in increased use and innovation of technology by these excluded markets.  When these simple steps are taken, IP policy and economic development policy converge to create policy that protects inventors and encourages development.

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[1][1]  Jeffery Sachs, The Global Innovation Divide, Innovation Pol’y & Econ., Apr. 2003, at 131-32.

[2]  Id. at 132.

[3]  Id.

[4]  Id.

[5]  Id.

[6]  Margaret Chon, Intellectual Property and the Development Divide, 27 Cardozo L. Rev. 2821, 2823 (2006).

[7]  Sachs, supra note 1, pg. 133.

[8]  Sachs, supra note 1, pg. 133.

[9]  Sachs, supra note 1, pg. 133.

[10]  Sachs, supra note 1, pg. 134.

[11]  Sachs, supra note 1, pg. 133.

[12]  Sachs, supra note 1, pg. 133.

[13]  Sachs, supra note 1, pg. 133.

[14]  Sachs, supra note 1, pg. 133.

[15]  Sachs, supra note 1, pg. 133.

[16]  Sachs, supra note 1, pg. 133.

[17]  Sachs, supra note 1, pg. 132-33.

[18]  Sachs, supra note 1, pg. 134.

[19]  Sachs, supra note 1, pg. 135.

[20]  Sachs, supra note 1, pg. 135.

[21]  Sachs, supra note 1, pg. 135.

[22]  Sachs, supra note 1, pg. 135.

[23]  Sachs, supra note 1, pg. 135.

[24]  Sachs, supra note 1, pg. 135.

[25]  Sachs, supra note 1, pg. 136.

[26]  Sachs, supra note 1, pg. 136.

[27]  Sachs, supra note 1, pg. 136.

[28]  Jeffery D. Sachs (2000), “Globalization and Patterns of Economic Development”, Review of World Economics, 136: 581.

[29]  Sachs, supra note 1, pg. 136.

[30]  Sachs, supra note 1, pg. 136.

[31]  Sachs, supra note 1, pg. 137.

[32]  Walter G. Park and Douglas C. Lippoldt, “Technology Transfer and the Economic Implications of the Strengthening of Intellectual Property Rights in Developing Countries”, OECD Trade policy Working Papers, No. 62, OECD Publishing (2008). Pg. 4.

[33]  Park & Lippoldt, supra note 25, pg. 4.

[34]  Park & Lippoldt, supra note 25, pg. 4.

[35]  Chon, supra note 6, pg. 2839.

[36]  Chon, supra note 6, pg. 2840.

[37]  Chon, supra note 6, pg. 2841.

[38]  Chon, supra note 6, pg. 2862,

[39]  Benjamin K. Sovacool, Placing a Glove on the Invisible Hand: How Intellectual Property Rights May Impede Innovation in Energy Research and Development, 18 Alb. L.J. Sci. & Tech. 381, 417 (2008).

[40]  Id. at 420.

The Access to Knowledge for Developing Nations by Naila Robinson

THE ACCESS TO KNOWLEDGE FOR DEVELOPING NATIONS

 

    Developing nations of the world have proposed an Access to Knowledge Treaty to offset the modern trend of increasing intellectual property protections that impede the transfer of technology and other knowledge based goods from developed nations.  The “Access to Knowledge” movement began with the implementation of the Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) in 1994.  Poorer, less developed nations entered into the TRIPS agreement to increase technology transfers from its wealthier, more developed counterparts.  During negotiations, arguments were made that if a developing nation implemented stronger intellectual property protection standards, a wealthier nation would be more inclined to provide foreign direct investments, licensing opportunities and high-quality technologies.[1] However, this argument proved to be illusory at best. Despite the advances of the 20^th and 21^st century, a significant knowledge gap as well a digital divide still exists between the wealthy and poor nations of the world.[2]  

In response, Brazil and Argentina, along with 14 other countries referred to as the “Friends of Development” drafted a “Treaty on Access to Knowledge” for presentment to the World Intellectual Property Organization (WIPO) in 2004.[3] Its stated objective is “to protect and enhance [expand] access to knowledge, and to facilitate the transfer of technology to developing countries.”[4]  The United States openly rejected this treaty stating that the WIPO already has the appropriate resources to deal with development issues.[5]  In light of the fact that developed nations may never agree to the Access to Knowledge Treaty, the goals of the Access to Knowledge Treaty can be accomplished through other means, naming reinterpreting the provisions of the TRIPS agreement with a pro-development agenda, developing countries establishing internal technical growth programs and the creation of large public domain for international access.

The Importance of the Access to Knowledge Treaty

            The current system of international intellectual property rights supports innovation and creativity, but, some claim. at the expense of economic development for poorer nations.  While it is not politically correct to assert this view, developed nations have no economic incentive or any formal treaty obligations to change the current system of intellectual property rights to support the economic growth of developing nations.  Many developed nations assert that a change in the current intellectual property scheme would actually have adverse effects on developed markets.  

Developing nations have created the Access to Knowledge Treaty to give developed nations another incentive to lower intellectual property protection standards, a human rights perspective. By limiting a nation’s access to knowledge through strong intellectual property protection of information relating to technology, education and healthcare, a developed nation could be deemed responsible for the sickness and mass illiteracy facing millions of people through-out the third world. Without access to critical technology, healthcare and knowledge based goods, humans in these countries would continue to suffer from poverty and despair for many generations to come.

To resolve this controversy, member nations need to assess the role of the United Nations, World Intellectual Property Organization, the World Trade Organization and other multinational organizations. If the role of these multi-national organizations is to protect weaker nations from stronger ones, to prevent human suffering and facilitate human flourishing on the planet, than the solution to the intellectual property problem is to allow the Access to Knowledge Treaty.  If the role of multi-national organizations is to provide an impartial forum for nations to discuss their grievances and enforce contractual arrangements between member states, then the Access to Knowledge Treaty should be abandoned and the provisions agreed upon by member states in the TRIPS agreement and subsequent bilateral agreements should be upheld.   

Background

If the initial impetus for the trade-related intellectual property (TRIPS) initiative was to prevent wholesale duplication of high-tech products, the trade agreement went well beyond that objective. [6] In recent years, intellectual property protections continue to grow significantly stronger both domestically and internationally. [7]  These higher standards of IP protection have failed to foster the transfer of technology through foreign direct investment and licensing as promised to developing nations.[8] 

Developing nations are still struggling to implement the provisions of the TRIPS agreements in their countries at great expense to their already limited finances.  Those funds could have been used to provide governments subsidies to universities and private industries that would further encourage technological innovation and growth. In addition to those standards set forth in TRIPPS, even stronger IP rights than those set forth in TRIPS agreement are being implemented through bilateral and preferential trade agreements that the United States and European Union have established with developing nations. [9]  These global minimum intellectual property standards do nothing more but ensure that the poorest countries in the world remain at a quasi-permanent status at the bottom of the technology and growth ladder.

By the very nature of the agreements themselves, it is clear that developing nations had very little influence on standard-setting exercises. Developing nations certainly have the numbers to have their agendas presented but as a general proposition, lacked the unity and co-ordination to effectuate positive change in international relations.[10] Developing countries were unable to negotiate more favorable agreements because of the lack of trust amongst themselves and a myopic focus on single issues rather than looking at the terms in the aggregate.[11]  Prior to the introduction of the Access to Knowledge Treaty, when developing nations attempted to negotiate different terms, they receive “symbolic attention and soft law solutions wrapped in the polite language of false concern.”[12]

The Access to Knowledge Treaty is joint effort among developing nations to use their numbers through coordination and unity to make development issues a criteria for intellectual property standard setting.   This treaty is designed to stop the growing trend of increased protections for all nations regardless of their levels of development. This treaty sets forth a provision that the role of intellectual property protection standards should be accessed on a case by case basis taking into consideration public interest benefits as well as costs. Developing nations have urged to the WIPO to amend its convention statement as follows:

(i) To promote the protection of intellectual property through the world through cooperation among states and, where appropriate, in collaboration with any other international organizations, fully taking into account the development needs of its Member States, particularly developing countries and least-developed countries. [13] 

 

            The Access to Knowledge Treaty proposes that the WIPO be mindful of the need overcome disparities in wealth, development and access to knowledge, a goal that has never been set specifically forth in a WIPO treaty. [14] If approved, this treaty could shift the burden from developing nations to improve the socio-economic status of its own citizens to richer, more developed nations, namely the United States and European Union. Prior to the introduction of the Access to Knowledge Treaty, the main focus of intellectual property treaties was to increase intellectual property protections for developed nations in the third world. 

            The Access to Knowledge Treaty has far-reaching implications.  The provisions relate to copyright and patent exceptions, distance learning, persons with disabilities, internet service providers, technological protection measures, publicly funded research, immigration, anticompetitive agreements and compulsory licensing.[15]  The general theme of these provisions is to lower intellectual property protections for right holders.  Many provisions in this treaty actually mirror the exceptions to intellectual property protection under intellectual property law in the United States. For example, one of the patent provisions in the treaty provides that patent protection should not be granted for discoveries, scientific theories or mathematical methods.  The sentiment is also reflected as an exception to patent protections under American patent laws.  

            However, one of most aggressive provisions of the treaty limiting IP protections is Article 3-1 of the May, 2005 draft of Access to Knowledge Treaty. Copyright protections would not apply to materials used for not-for-profit teaching or scholarship, works used for secondary readings by educational institutions, use of works for legitimate reverse engineering and use of works for primary instructional materials if those materials are not made readily available by right holders at a reasonable price.[16]  Part 3  further creates a catchall provision that parties to this treaty shall implement a general exception to copyright law, applicable in special cases where the social, cultural, educational or other developmental benefit outweigh the costs imposed by it on private parties.[17]

In essence, this article weighs the legitimate financial interests of the intellectual property right holder against the overall public benefit interest in the protected material.  To offset the rather aggressive tone of the provision, the treaty states that the “exceptions to the copyright laws constitute special cases that do not conflict with a normal exploitation of the work and do not unreasonably prejudice the legitimate interest of the right holder. “ [18] 

Article 10-1 of this treaty attempts to eliminate visa restrictions for students to study at universities in other nations.[19] Article 11 mandates member states to finance free and open knowledge goods but the obligation amount varies by the Gross Domestic Product and level of development of each member nation.[20]  It is certainly reasonable that developed nations would hesitate to enter into an agreement that allows developing nations to implement policies that could affect a nation’s domestic immigration policies. Furthermore, the agreement provides that developed nations take on additional financial burdens for less developed nations to finance knowledge based goods.

Arguments for both sides

            At the introduction of the treaty, the United States affirmed its belief that WIPO already has the means to address development issues. The United States recommended moving development issues to an existing technical committee, Permanent Committee on Cooperation for Development Related to Intellectual Property (PCIPD) after Canada proposed the technical committee be reorganized to address broader development issues.[21] Japan and the United States are the only two nations supporting this position and the EU has not expressly rejected the Access to Knowledge.[22].  

            The United States is a fierce protector of strong intellectual property rights. On the issue of intellectual property, the US has only been prepared to negotiate higher standards. Calls by organizations like the World Bank to rebalance TRIPS has been drowned out in the US corridors of power by the footfalls of corporate lobbyists bearing checks for campaign re-election.[23]

 Culturally speaking, Americans believe that strong Intellectual property have been a strong driver of innovation rather than an impediment. Strong Intellectual property rights relate to a deeply held American philosophical belief in self-reliance.  The Access to Knowledge provisions certainly runs counter to that belief and seems more like a “handout”.  Brazil has indicated that the United States totally rejects anything that changes the WIPO’s modus operandi that helps developing countries.[24]

The Friends of Development are seeking a fundamental reform at the WIPO using the Access to Knowledge Treaty. Developing nations are seeking to infuse a development dimension throughout all WIPO activities. Developed nations claim that their voices have been historically ignored during WIPO activities. Furthermore, Brazilian delegates stated that the alleged incentives of higher IP protections have gone unrealized for developing nations. In addition, there has been widespread concern that new rising norms of protection may actually be inhibiting rather than facilitating transfer of technology and that implementing any provision of the TRIPS agreement is actually cost prohibitive to many developing nations.

There is certainly some merit to arguments proposed by the Friends of Development. Few now-developed economies underwent significant technological learning and industrial transformation without the benefit of weak intellectual property protection.[25] From 1950 to 1980, Japan pursued an industrial property regime that favored small-scale innovation, adaption and diffusion, and the licensing of new technologies.[26] Key features of this systems included pre-grant disclosure, rapid opposition to patent grants, narrow parent claims, local reliance on utility models and advantages for licensing.[27]  South Korea in the 1970’s encouraged domestic firms to acquire and adapt mature technologies available on international markets for purposes of developing local innovation capacities.[28] More recently, Indian software companies show just have fast a developing nation can catch on once the relevant technical know-how becomes embedded in an appropriate commercial environment.[29]

Alternatives to the Treaty

In the arguments supporting the Access to Knowledge Treaty, the Friends of Development blame many of their countries woes on the strong intellectual property regimes set forth by developed nations that limit access to information. Nevertheless, developed nations have not responded to this sentiment with one obvious reality, no matter how restrictive the IP laws may be, they may not be the major cause of human suffering and lack of access to knowledge around the world.[30]

Before pointing the finger at developed nations, developing nations should conduct a critical self-assessment. Any government unwilling to establish a functioning public sphere, a free press or government transparency will impede their own access to knowledge.  Many developing nations often look to outside resources to solve its problems when a reasonable solution can exist within its own borders.    

As an alternative to the access to knowledge treaty, a government can promote its access to knowledge through regulation of technology driven industries, government procurement policies that encourage private actors to produce knowledge and information goods. This approach to innovation is certainly more participatory and one that advantages developing countries that have low-cost, highly-trained knowledge workers.[31] In addition, research and development subsidies can be much more important to a developing nation than any IP law could ever be.

Another alternative to the Access to Knowledge Treaty is the ”Creative Commons” initiative where intellectual property holders pick and choose which rights to retain and which rights other may have access to, free of charge.[32]  The advantage to a Creative Common System is that a developing nation and its citizens can have free access to information without time consuming bureaucratic procedures or unfair trade set-offs established during WIPO negotiations. The disadvantage to this system is the right holder must voluntarily post this information. It is unlikely that the right holder of any new, potentially lucrative technology rights would voluntarily give this information away. 

Reasonable Solutions

            While it is easy to understand the concerns of developing nations, the Access to Knowledge Treaty may not be the appropriate manner to address this issue. As the United States so bluntly stated, WIPO already has measures in place to deal with development issues and intellectual property issues.  Additionally, the introduction of another treaty may have little effect on the behavior of member states without a fundamental shift worldwide in intellectual property policy. As demonstrated by the TRIPS agreement, even if both developed and developing nations signed the Access to Knowledge Treaty, it is likely that its terms would be eroded by separate bilateral agreements between member states.    

            The United States has a firmly held belief that strong intellectual property leads to innovation.  In fact, this belief translates into stronger intellectual property protections for rights holders in American courts.  The United States itself has become increasingly protectionistic. The federal courts have practically eliminated the research exemption under which universities had operated for more than 50 years.[33]  In light of this fact, the United States is certainly not going to sign the Access to Knowledge Treaty which gives developing nations and its universities access to IP that is unavailable to its own universities. As a further disincentive, compulsory licensing and extensive copyright and patent exceptions are difficult concepts for developed nations to embrace without an economic motivation to do so.   

            The problem with developing nations and technology transfer can be resolved through enforcement of the TRIPS agreement.  Part 7 and Part 8 of the TRIPS agreement provide that technology transfer to developing nations is an objective of the TRIPS agreement.[34]  When the TRIPS agreement was signed, each member nation agreed that technology transfer to the developing world was a goal to be achieved.

Due to the special status granted to least developed countries in the TRIPS agreement, the governing body of the TRIPS agreement should not have allowed developed or developing nations to circumvent any stated objective of the TRIPS agreement through separate bilateral agreements. If an agreement is made, each bilateral agreement with a nation labeled as a least developed nation should be carefully scrutinized to ensure compliance with TRIPS under a reinterpretation of TRIPS that balances strong IP rights against its public interest benefits.  If the bilateral agreement is found to be in violation of the TRIPS agreement or its stated objectives, the governing body should be required to investigate and issue sanctions where appropriate.  If a developed nation violates the TRIPS agreement through a separate agreement, that nation should be required to transfer a certain type of IP right to the offended nation. The type of transfer should be determined by the nature and expectations of the parties to the agreement. If the offending party is a least developed nation, the appropriate sanction could be the rescinding of the bilateral agreement and the benefits associated therein.  

If the member nations would rather avoid a litigation/enforcement regime, developed nations could voluntarily lower their intellectual property protections, similar to the standards of the Creative Commons Initiative. A developed nation would have the option of allowing access to a certain technology right or knowledge based good. Under this system, a developed nation could protect their most precious works and still support human rights with the free exchange of knowledge to the developing world.

In the absence of volunteer based system, WIPO could establish criteria unequivocally lowering intellectual property protections for products relating to healthcare and education. These criteria would be narrow in scope but would provide the developing world much needed information to improve the quality of life for its citizens and still encourage innovation.   

            As an offering to developed nations, in 2007, the WIPO General Assembly adopted its development agenda with the objective of integrating this development dimension in all of the Organization’s activities.[35]  One of the key objectives to facilitating a development oriented approach to IP is the creation a robust public domain. [36] Each member nation is now responsible for the norm-setting process and a new emphasis will be placed on information sharing for developing nations.[37]

Conclusion

            Developing nations proposed the Access to Knowledge Treaty to have their circumstances considered during intellectual property standard negotiations. Although the treaty has not been implemented, its objectives are leading to a fundamental shift of policy at WIPO.   Some of the goals of the Access to Knowledge Treaty are being implemented through a re-interpretation of the TRIPS agreement and the creation of public domain with international access. While it may be overly optimistic to say that developing nations will undergo unprecedented economic growth under these new IP objectives, the Friends of Development can see their efforts have not been in vain.

 

 

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[1] Keith E. Maskus &  J. H. Reichman, The Globalization Of Private Knowledge Goods and the Privatization of Global Public Goods, J Int. Economic Law 2004 7: 279-320; doi:10.1093/jiel/7.2.279.

[2] WIPO, Proposal by Argentina and Brazil for the Establishment of a Development Agenda for WIPO, 31st (15th Extraordinary) Sess., WO/GA/31/11 (Aug. 27, 2004), at http://www.wipo.int/documents/en/document/govbody/wo_ gb_ga/pdf/wo_ga_31_11.pdf

[3] US, Brazil Duel on WIPO Development Agenda, Intellectual Property Watch, at http://www.ip-watch.org/weblog/2005/07/21/us-brazil-dual-on-wipo-development-agenda/

[4] WIPO, Proposal by Argentina and Brazil for the Establishment of a Development Agenda for WIPO, 31st (15th Extraordinary) Sess., WO/GA/31/11 (Aug. 27, 2004), at http://www.wipo.int/documents/en/document/govbody/wo_ gb_ga/pdf/wo_ga_31_11.pdf

[5] US, Brazil Duel on WIPO Development Agenda, Intellectual Property Watch, at http://www.ip-watch.org/weblog/2005/07/21/us-brazil-dual-on-wipo-development-agenda/  

[6] Keith E. Maskus &  J. H. Reichman, The Globalization Of Private Knowledge Goods and the Privatization of Global Public Goods, J Int. Economic Law 2004 7: 279-320; doi:10.1093/jiel/7.2.279.

[7] Amy Kapczynski, The Access to Knowledge Mobilization and New Politics of Intellectual Property, 117 YLJPP 262(2008)

[8] WIPO, Proposal by Argentina and Brazil for the Establishment of a Development Agenda for WIPO, 31st (15th Extraordinary) Sess., WO/GA/31/11 (Aug. 27, 2004), at http://www.wipo.int/documents/en/document/govbody/wo_ gb_ga/pdf/wo_ga_31_11.pdf

[9] Keith E. Maskus &  J. H. Reichman, The Globalization Of Private Knowledge Goods and the Privatization of Global Public Goods, J Int. Economic Law 2004 7: 279-320; doi:10.1093/jiel/7.2.279.

[9] Id.

[10] Peter Drahos, Access to Knowledge: Time for Treaty, at www.iprsonline.org/ictsd/docs/Drahos_AccessKnowledge_treaty_BRIDGES9-4.pdf. 

[11] Id.

[12] Id.

[13] WIPO, Proposal by Argentina and Brazil for the Establishment of a Development Agenda for WIPO, 31st (15th Extraordinary) Sess., WO/GA/31/11 (Aug. 27, 2004), at http://www.wipo.int/documents/en/document/govbody/wo_ gb_ga/pdf/wo_ga_31_11.pdf

[14] Treaty on Access to Knowledge (May 9, 2005) (draft), http:// www.cptech.org/a2k/a2k_treaty_may9.pdf.

[15] Id.

[16] Id.

 

[17] Id.

[18] Id.

[19] Id.

[20] Id.

[21] US, Brazil Duel on WIPO Development Agenda, Intellectual Property Watch, at http://www.ip-watch.org/weblog/2005/07/21/us-brazil-dual-on-wipo-development-agenda/

[22]  Id.

[23] Peter Drahos, Access to Knowledge: Time for Treaty, at www.iprsonline.org/ictsd/docs/Drahos_AccessKnowledge_treaty_BRIDGES9-4.pdf

[24] US, Brazil Duel on WIPO Development Agenda, Intellectual Property Watch, at http://www.ip-watch.org/weblog/2005/07/21/us-brazil-dual-on-wipo-development-agenda/

[25] Keith E. Maskus &  J. H. Reichman, The Globalization Of Private Knowledge Goods and the Privatization of Global Public Goods, J Int. Economic Law 2004 7: 279-320; doi:10.1093/jiel/7.2.279.

[26] Id.

[27] Id.

[28] Id.

[29] Id.

[30] James Balkin, What is the Access to Knowledge at http://balkin.blogspot.com/2006/04/what-is-access-to-knowledge.htm

[31] Peter Drahos, Access to Knowledge: Time for Treaty, at. www.iprsonline.org/ictsd/docs/Drahos_AccessKnowledge_treaty_BRIDGES9-4.pdf

[32] EDUCAUSE LEARNING INITATIVE, 7 Things You Should Know about… Creative Commons, at net.educause.edu/ir/library/pdf/ELI7023.pdf(March 2007)

 

[33] Keith E. Maskus &  J. H. Reichman, The Globalization Of Private Knowledge Goods and the Privatization of Global Public Goods, J Int. Economic Law 2004 7: 279-320; doi:10.1093/jiel/7.2.279.

 

[34] Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15. 1994, Marrakesh Agreement Establishing World Trade Organization

[35] Dr. Uma Suthersanen, A2K and the WIPO Development Agenda: Time to List the “Public Domain,” at http://www.iprsonline.org/New%202009/Policy%20Briefs/policy-brief-1.pdf (December 2008).

[36] Id.

[37] Id.

The Linkage Between Intellectual Property and Human Rights Standards

                                            Tina Shah

The importance of the intellectual property is increasing day by day, as it has become a very significant commodity in international transactions. In recent years, the linkage of human rights standards and intellectual property has become a much discussed topic in the international community. The debate has reached new heights since the World Trade Organization (WTO) and Agreements on Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement) entered into force in 1995, and an increase of strict intellectual property rules at the bilateral, regional, and multilateral levels.  A facet of the debate is whether intellectual property rights are human rights. This questions turns on the interpretation of the human right to “protection of the moral and material interests resulting from any scientific literary, or artistic production of which he is the author” in the Universal Declaration of Human Rights (UDHR), and the International Covenant on Economic, Social and Cultural Rights (ICESCR).[1] Moreover, at the heart of the discussion is the effect of intellectual property rules, especially patents and copyrights, on the ability of States to comply with their obligations under international human rights law, such as the obligations to ensure access to affordable medicines. [2] Thus, the question this essay will analyze is what the relationship between human rights and intellectual property is and its consequences.

Not long ago, a discussion on the development agenda for the World Intellectual Property Organization (WIPO) has seen a renewal of this debate. For instance, in a proposal put forth by the “Group of Friends of Development” argues that “under no circumstances can human rights, which are inalienable and universal, be subordinated to intellectual property protection”. [3]  This view is also supported by non-governmental organizations concerned about the effect of high intellectual property standards on health, food, educations, culture, and access to knowledge.[4] On the other hand, some non-governmental agencies have invoked the human right to protection of moral and material interests of authors are human rights, and request higher standards of IP protection.[5] Therefore, the most intriguing question is whether intellectual property rights are themselves human rights.  

In order to answer this, it would be pertinent to look at the relevant international human rights instruments, namely the Universal Declaration of Human Rights and the International Covenant on Economic, Social and Cultural Rights. Article 27 (2) of the UDHR states that everyone has the right to protection of moral and material interests resulting from any scientific, literary or artistic work of which he is the author. Similarly, Article 15.1 (c) of the ICESCR recognizes the right of everyone to benefit from the moral and material interests resulting from any scientific, literary or artistic production of which he is the author. These provisions have been used by many to argue that fundamental human rights covenants recognize intellectual property rights as being a human right. Both Article 27 (2) of the UDHR and Article 15.1 (c) emphasize the moral and material benefits to be derived by the ‘author’.  Moreover, the ordinary meaning of the terms of the treaty needs to be understood in the context of its objective and purpose. In this regard, the overall context of Article 15 (1) of the ICESCR talks not just of the material benefits for the author but also recognizes the right of everyone to take part in cultural life and to enjoy the benefits of scientific progress and its applications.[6] Therefore, Article 15 (1) is concerned with striking a balance between the rights of the author, who makes a specific contribution, with the individual and collective rights of society to benefit from this contribution. This implies realization of all rights in a harmonious manner.

It is also important to look at General Comment No. 17 of the ICESCR committee, on the position of intellectual property rights in the covenant. The significance of general comments stems from the fact that they act as important authoritative interpretations of provisions of the covenant. This general comment states that the right of everyone to benefit from moral and material interests resulting from any scientific, literary or artistic production of which he/she is the author is a human right.[7] According to the committee, this human right is derived from the inherent dignity and worth of all individuals.[8] However, the committee distinguishes between the right of the author to benefit from moral and material interests and rights recognized under the IP system. There is a distinction between beneficiaries of protection from a human right to moral and material benefits resulting from any scientific, literary or artistic production enjoyed by an author, and from the beneficiaries of an intellectual property rights system. [9] Benefits from the former allow the author an adequate standard of living and safeguards the relationship between the author and his creation and the people, community and other groups that benefit from the creation. Benefits from the latter, on the other hand, are enjoyed by businesses. The committee also states that the right to benefit from the protection of moral and material interests resulting from the scientific, literary or artistic production encourages the active contribution of the creator to society.[10] This argument is similar to the incentive argument made to justify the granting of intellectual property rights, and perhaps blurs the distinction that the committee is endeavoring to draw.

The committee’s position is slightly confusing. On one hand it distinguishes between the rights given in Article 15.1 (c) and an intellectual property right; on the other hand, it does not elaborate on how these rights are different except for stating that the right under Article 15.1 (c) is not a monopoly right recognized under the intellectual property system, and that it is linked to the author being able to earn an ‘adequate livelihood’. In other words, interpretation of the committee’s statement implies that a patentee so long as the benefits derived are only for an ‘adequate livelihood’, will not infringe Article 15.1(c). However, if the patentee gets a monopoly right of the type that exists in the intellectual property framework, then the right would not fall under Article 15.1(c). From this interpretation it remains unclear where material benefits end and where monopoly rights begin.

A further issue in this section is “author” is defined as “the creator, whether man or woman, individual or group of individuals, of scientific, literary or artistic productions, such as, inter alia, writers and artists.”[11]  “This definition is positive in as much as it broadens the scope of protection to indigenous communities and cultural minorities, whilst explicitly limiting protection to “natural persons.” Indeed the General Comment states that entitlements of legal entities under intellectual property law are “different in nature” and therefore “not protected at the level of human rights.” However, in the definition of “benefit from the protection” it is stated that protection “need not necessarily reflect the level and means of protection found in present copyright, patent and other intellectual property regimes, as long as the protection available is suited to secure authors the moral and material interests resulting from their productions.”[12] This reference to intellectual property standards is particularly confusing considering that intellectual property rules may not necessarily be the most appropriate legal tool to protect authors.

Likewise, the statement that article 15(1)(c) “by no means prevents States parties from adopting higher protection standards in international treaties” provided that these standards “ do not unjustifiably limit the enjoyment of other Covenant rights”[13] could be risky in practice. In fact, States could use this statement to argue in favor of higher intellectual property standards, for instance that higher patent protection is justified in order to promote research and development of new medicines, even if this higher protection has the effect of increasing cost and reducing access to medicines. Thus, there is a danger that this will lead to a system of protection that will be even stricter than the present patent systems, which currently benefits corporations. The General Comment also states that State parties have a duty to prevent that unreasonably high costs for access to essential medicines, means of food production, or to schoolbooks and learning materials, undermine the rights of large segments of the population. One should hope that if it came down to the wire, this part of the General Comment would prevail over those mentioned above, which could limit free sharing of information, and insufficiently take into account the needs of indigenous groups.

For instance, pharmaceutical patents directly affect the fundamental right to “health”. Medical care and access to medicines are vital features of the right to the highest attainable standard of health. It is argued that work towards the achievement of the right to health within existing institutions and structures are inadequate. Some content that these inadequacies are caused largely to constraints imposed by the international political and economic bodies. This view may be evidenced after the adoption of the WTO’s TRIPS agreement. Advocates of this view argue that the obligations imposed by the TRIPS agreement, especially in the form of medical patents, get in the way of countries fulfilling their international obligations towards fulfilling their citizens’ right to health, which is a well-recognized human right. TRIPS impacts access to medicines both by globalizing minimum standards of patent protection and by providing key flexibilities for bypassing intellectual property barriers while still providing some compensation to patent holders.  Article 25 of the UDHR states that ‘everyone has the right to a standard of living adequate for the health and wellbeing of himself… including food, clothing, housing and medical care…’. Similarly, Article 12 of the ICESCR advocates the ‘…right of everyone to the enjoyment of the highest attainable standard of physical and mental health’. Article 12.2 (d) of the ICESCR places an obligation on states to create conditions that ensure medical service and medical attention in the event of sickness. If intellectual property rights are recognized as human rights, it would result in unreasonable outcomes where one human right conflicts with another human right. In particular, medical patents obligate a country to introduce product patents in pharmaceuticals, thereby prohibiting the generic manufacture of medicines, which in turn, leads to higher medicine prices, adversely affecting accessibility of medicines by the poor and endangering the human right to health.

Furthermore, intellectual property rights, particularly in rich country markets, provide incentive for research and development investment, by conferring patent ownership for a specified time period, thus guaranteeing an exclusive market and supra-competitive pricing.[14] But global incentives to encourage investment in R&D for new products are not ordinarily dependent on small-volume sales in poor countries and even minimal incentives must be balanced by the imperative of affordable prices for poor consumers. The effect of TRIPS on prices of newer essential medicines and the counter-balancing effects of generic competition are of particular concern for developing countries. Vital flexibilities are set out in principle in TRIPS, to enable poor countries to import patented drugs from the cheapest source (parallel importing), and to compulsorily license generic production to meet a wide range of public health need.[15] The importance, indeed primacy of public health, was clarified in the WTO Doha Declaration on the TRIPS Agreement and Public Health and flexibilities for exporting and importing generic medicines pursuant to compulsory licenses were further expanded in the WTO Decision of August 30^th 2003 Implementing Paragraph 6 of the Doha Declaration.

However, many poor countries do not yet have legal and administrative frameworks in place that would enable them to make appropriate use of available flexibilities, and some of the flexibilities are now being susceptible to bilateral and regional trade agreements as well.[16] The patent system may entail considerable short-term costs for developing countries, mainly due to administrative costs and problems, with higher prices for medicines and key technological inputs, while long-term benefits seem uncertain and costly to achieve in many nations, particularly for the poorest countries. Therefore, developed countries are pushing for higher protection for intellectual property rights just because of economic practicality, and this would impair the development of underdeveloped and developing countries discouraged as they do not have enough funding, knowledge and technology to make inventions or breakthroughs that can be protected by intellectual property rights. Moreover, higher standards of patent protection are unlikely to have a positive effect on local innovation, except in those few countries and sectors that have reached a certain level of technological development and have the capacity to finance substantial research and development. This discussion illustrates that intellectual property rights are not human rights, essentially because there are certain differences between the two. Thus, considering intellectual property rights as human rights could cause serious consequences on the fulfillment and enjoyment of existing human rights.  

Finally, it is evident that the issues surrounding intellectual property and human rights are complex and contentious. It is essential that a fair balance be struck between the long-term social objective of providing incentives for future inventions and creation, and the short-term objective of providing the world’s poor with affordable medicines to combat diseases and public health emergencies. TRIPS, although claiming to strike this balance, can be seen as not permitting for sufficient quantities of generic drugs in developing countries. As a result, millions receive no treatment for treatable diseases, as branded drugs remain too expensive for the majority of the world’s poor.

 

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[1] Article 27(2) Universal Declaration of Human Rights (UDHR) and article 15(1)(c) International Covenant on Economic, Social, and Cultural Rights (ICESCR).

[2] Article 12 ICESCR, and General Comment No. 14 (2000).

[3] WIPO documents, Proposal by Argentina and Brazil for the Establishment of Development Agenda for WIPO, Oct. 5, 2004 and Proposal to Establish a Development Agenda for WIPO, Apr. 6. 2005.

[4] 3D-Trade-Human Rights-Equitable Economy, Intellectual Property, Development and Human Rights: How Human Rights Can Support Proposals For WIPO Development Agenda, Policy Brief, Feb. 2, 2006.

[5] Ronald Cass, Are Intellectual Property Rights Human Rights?, Federalist Society for Law & Public Policy Studies, 2006.

[6] ICESCR, Day of General Discussion on Drafting of the General Comment on Article 15(1)(c), Nov. 27, 2000.

[7] Committee on Economic, Social, and Cultural Rights, General Comment No. 17, Nov. 21, 2005, http://www.ohchr.org/english/bodies/cescr/comments.htm.

[8] General Comment No. 17, paragraph 2.

[9] General Comment No. 17, paragraph 7.

[10] General Comment No. 17, paragraph 11.

[11] General Comment No. 17, paragraph 7.

[12] General Comment No. 17, paragraph 10.

[13] General Comment No. 17, paragraph 11.

[14] Meir Perez Pugatch, The Intellectual Property Debate: perspective from law, economics, and political economy, 2006.

[15] Peter Drahos and John Braithwaite, Information Feudalism, 2003.

[16] Robert Sherwood, Global Prospects for the Role of Intellectual Property in Technology Transfer.

The Debate over Access to Knowledge Treaty’s Benefits, Costs and Effectiveness

Alejandro Soto

The world of international intellectual property policy over the past century has been focused on harmonization of substantive IP laws among the developed nations.  Specifically, the countries and the inventors they represent that produce the most intellectual property lobby for favorable laws abroad in order to protect their innovations.   This protection allows intellectual property rights holders to recoup his investment, profit from their innovation and, in certain types of IP, like patents, for example, expand their market shares.  This focus among the international community, however, has largely ignored the great disparity of wealth between developed and underdeveloped countries.  One important indicator of a country’s development and wealth is the extent of intellectual property it produces and intellectual property it holds.   It may not be a coincidence that underdeveloped countries that have fewer intellectual property rights and produce comparatively less intellectual property also happen to be the underdeveloped countries of the world.  As a result of this correlation, a growing concern for this disparity began to surface.  This movement has come to be known as the New International IP Agenda.[1]

The debate between the old IP agenda and the new IP agenda, described above, revolves around the same general argument regardless of the type of reform being offered:  Old IP agenda urges strong and harmonized IP protection throughout and only through these incentive-type of policies is innovation and, therefore, wealth and development created, strong IP protection is not the cause of poverty around the world; New IP agenda argues that the old agenda policies have been pursued and enacted for decades with no decrease in the wealth gap between developed and underdeveloped countries and that undeveloped countries deserve leniency in terms of access and enforcement in order to spur development.  This is a fundamental difference in philosophy of how and where intellectual property fits in the world:  intellectual property rights are a fundamental right and wealth and development follow or right to access to knowledge and medicines are a fundamental right and intellectual property rights are a vehicle.   Framing the debate in these terms seems to makes the prospects of a compromise or solution all the more difficult to achieve and governs the differing opinions. 

This new IP agenda movement was spurred to life by the creation of the World Trade Organization’s (WTO) Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS) in 1994.[2]  TRIPS is an agreement among WTO member nations agreeing to establish and enforce minimum standards for intellectual property protection.[3]  Critics of TRIPS, including developing countries and non-governmental organizations (NGOs), argue that TRIPS’s increased IP protection has further strained the developing countries efforts to access IP, improve on existing IP and develop their own IP, thus contributing to their development deficiency.[4] 

The New International IP Agenda began to formalize with the WTO’s Doha Declaration in 2001, where it allowed for flexibility with TRIPS with regard to compulsory licenses that would address public health related issues.[5]  Also, in 2002,

Brazil

and

Argentina

formally proposed to the World Intellectual Property Organization (WIPO) a new direction and focus in international intellectual property policy, advocating for a “development dimension” to the formation of new IP law and policy.[6]  WIPO took this proposal under consideration and agreed to set a course for this new direction.[7]  One of the ways that proponents of the New International IP Agenda seek to cement this new ideal is through an Access to Knowledge Treaty (A2K Treaty).

A2K is a treaty proposal by developing countries and NGOs, namely CP Tech, Third World Network and the International Federation of Library Association.[8]  This treaty proposal seeks to balance IP rights protection with global development needs through an institutional reform that drives policy away from a pro-IP bias.  Advocates for this type of reform argue that the A2K treaty “should be based on the human rights model, in which access of knowledge is acknowledged as a human right, that this right is primary, and the rights to holders of copyrights or patents are seen as secondary or exceptions, and should thus be limited and in ways that would not threaten the primary human rights.”[9]  In accordance with the human rights model, the treaty proposes: 1) imposing an expansive version of U.S.-type fair use exceptions to copyright law; 2) limits on legal recognition of copy protection and digital rights management technology; 3) restrictions on the patentability of inventions arising from government-funded research; 4) broader compulsory licensing of copyrighted material; 5) proposals calculated to encourage open access publishing models and free/open source software and 6) proposals for a protocol on the transfer of technology and knowledge to developing countries; and funding obligations for the public development of “knowledge goods”.[10]

            New International IP Agenda advocates hail the A2K Treaty as a substantive goal, that when met washes away the pro-IP bias of international IP policy and addresses the developmental needs of third world countries.  Critics of the A2K Treaty, however, argue that, while it is true that a digital divide and knowledge gap exist between developed and underdeveloped countries, an access to knowledge type treaty is not the proper approach.  Critics claim that such a treaty would stifle the very type of innovation that international property has encouraged and to which underdeveloped countries seek to have access.  They reason that provisions, like the ones offered in the A2K Treaty, take away the incentive to innovate, which is a foundation of the concept of intellectual property rights creation.  Critics also regard the A2K Treaty as an incomplete listing of principles and wishes that doesn’t stand a realistic chance to be effective.[11]  They believe that in its current form the A2K Treaty lacks the specifics that would cause countries to faithfully abide by and enforce its provisions.[12] 

Additionally, critics of open source solutions, like A2K, claim a distrust of governments of underdeveloped countries.[13]  The belief is that if those governments are given expansive control over IP, not only will the innovator’s profits be diminished, but the people who need access to the IP will not receive the IP in the manner as proposed by the New IP Agenda.[14]  This distrust, however, goes both ways.  Governments of underdeveloped countries no more trust the principles and motivations of developed countries and the companies they represent than the developed countries trust the sometimes hard-line, less-stable governments of underdeveloped countries.  Admittedly, underdeveloped countries already have a history that supports their argument of distrust of developed country IP motives, meaning: the old IP policy has been lobbied, negotiated and implemented by developed countries with their own interests in mind to the detriment of development in the third world.  Nevertheless, the distrust argument, regardless of who is asserting it, should be dropped from the debate on IP policy reform as it does not constructively address the issue of development. 

            Proponents of access to knowledge type reform under the New IP Agenda have had some success, despite opposition from developed countries.  While convincing WIPO to consider the New IP Agenda in future international IP policy, A2K proponents have also aided in passing an amendment to TRIPS, helping drop prices on AIDS medicine in developing countries by more than ninety-five percent and placing procedural protections and limits on the Indian Patent Law, which may then drive medicine prices down.[15]  Proponents of these changes have not and should claim victory just yet, however.  While these types of changes may provide access to books, medicine and technological know-how, these changes do not necessarily translate to sustained development and a generation of wealth, which is the ultimate goal.  Critics cite these types of changes as merely cutting the same pie differently, instead of creating a bigger pie, i.e. generating wealth. The changes described are, however, a step toward addressing the wealth disparity issue. 

Previous efforts to assist third world countries within the world of IP have proved fruitless.  For example, the developed countries’ requirements under TRIPS have not been reciprocated down to the underdeveloped countries (agriculture incentives for stricter IP rights enforcement).[16]  Reform needs to be taken seriously by making new measures compulsory.  Speculating on benefits and costs of a treaty-type approach, while important, needs to give way to implementation of substantive, far-reaching and binding law.  This, no doubt, may seem like a dangerous proposition, but in order to combat the wealth and knowledge gap in the world, drastic measures need to be taken. 

According to new IP agenda advocates, a drastic measure is embodied in the A2K Treaty.  Critics, however, are correct in labeling it as, essentially, inadequate.  Presently, the Treaty needs to have more specifics that further the purposes and aspirations that are currently listed as its provisions.  Of course, input from all sides of the debate is needed, but from the outset, deference to the developmental needs of underdeveloped nations needs to be given.  This deference may include, for example, favorable voting schemes to counter what is sure to be fierce opposition from the developed world.  As an altruistic opinion may state: history shows that such deference is due.  The mere fact that countless people die of curable disease is but one reason that demonstrates the urgency of a solution that provides for access.  Generally, lack of access to technology, medicine that, arguably, result in slowed development and create public health issues is a convincing argument that does not need more to add urgency.  This argument, as stated earlier is premised on acces to IP as a human right, which the old IP agenda do not agree with.  This difference is what makes the debate so difficult. 

The difficulty, however, should not allow the parties involved to view the debate as a matter of win or lose or us versus them.  The A2K Treaty as it stands today is deficient and whatever progress haSs been made with such an approach may be shortsighted, but the fact remains, and both parties admit, there is a problem.  Whether access to knowledge is a primary human right or not shouldn’t determine the sides and the variables with which to negotiate.  A balanced approach that takes into account both sides’ interests has been advocated, but never faithfully pursued.  The solution needs to shelve distrust, allow some deference to the underdeveloped countries, have specific details on all countries responsibilities and have strict and faithfully implemented enforcement by both the underdeveloped and developed countries.  A2K Treaty is but a small step in that direction, but it is in the correct direction. 

---

[1] Intellectual property: How Intellectual Property Became Controversial: NGOs and the New International IP Agenda

[2]

Id.

[3] Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, LEGAL INSTRUMENTS – RESULTS OF THE URUGUAY ROUND, vol. 31, 33 I.L.M. 1197 (1994) [hereinafter TRIPS Agreement]

[4] See supra note 1.

[5] See supra note 1.

[6] WIPO GENERAL ASSEMBLY, Thirty-First (15th Extraordinary) Session

Geneva

, September 27 to October 5, 2004, “PROPOSAL BY

ARGENTINA

AND

BRAZIL

FOR THE ESTABLISHMENT OF A DEVELOPMENT AGENDA FOR WIPO”.

[7] See Geneva Declaration on the Future of the World Intellectual Property Organization, available at http:// www.cptech.org/ip/wipo/futureofwipodeclaration.pdf (last visited September 10, 2009) [hereinafter Geneva Declaration].

[8] Intellectual Property Watch, Experts Debate Access to Knowledge, February 15, 2005, available at http://www.ip-watch.org/weblog/2005/02/15/experts-debate-access-to-knowledge/?res=1280_ff&print=0 (last visited September 10, 2009).

[9] James Balkin, The Yale Information Society’s Access to Knowledge Conference, April 21, 2006, http://balkin.blogspot.com/2006/04/what-is-access-to-knowledge.html (last visited September 10, 2009).

[10] See CPTech.org, May 9, 2005 Draft Treaty on Access to Knowledge, available at http://www.cptech.org/a2k/consolidatedtext-may9.pdf (May 9, 2005) (last visited September 10, 2009).

[11] See supra note 1.

[12] See supra note 1.

[13] See supra note 1.

[14] See supra note 1.

[15] Amy Kapczynski, THE ACCESS TO KNOWLEDGE MOBILIZATION AND THE NEW POLITICS OF

INTELLECTUAL PROPERTY, 117 Yale L.J. 804 (March, 2008).

[16] Intellectual Property and the Knowledge Gap, Oxfam Policy Paper (December 2001), available at http://www.globalissues.org/article/42/the-wto-and-free-trade (last visited September 10, 2009).

David May Not Have Won After All

Jonathan Cole

There is a great disparity between developed and developing nations in many aspects. Everything from the quality of life of its citizens, to the ramifications that governments face for not complying with their treaty obligations highlights the divide between countries.  This disparity is often compared to the Biblical tale of David and Goliath.  Simply accounting for the size of their economies, the United States is 8,857 times larger than Antigua.[1]  This would mean that if David stood at a meager 5 feet, Goliath would stand at a whopping 8 miles tall.  Unfortunately, comparing the fight of developing nations to David is a gross understatement of the inequities among the parties.  Many articles and pundits often cite the Biblical analogy without truly thinking of the ramifications.  No stone David could throw would even be noticed by someone taller than Mt. Everest. For this very reason, the World Trade Organization’s Dispute Settlement Body (DSB) has attempted to level the playing field with a concept called “Cross Retaliation”. 

            In the international sphere, treaties and organizations have bound countries by rules that are fixed and announced beforehand.  Such rules make it possible to foresee with fair certainty how other countries will behave, and therefore plan their own affairs on the basis of this knowledge.[2] One of the biggest rules that the World Trade Organization (WTO) has set for its members is the opening of markets and a decrease in national protectionism.  Developed countries are enforcing this rule on the developing nations but are paying no heed to it themselves.  This callous disregard by the Goliaths to the needs of developing nations has left developing nations with an unfulfilled contract.  With no means of enforcing their rights granted from the WTO, developing nations are left with a cause of action and no apparent remedy.  Developed nations strictly enforce Trade-Related Aspects of Intellectual Property (TRIPS), but do not hold themselves accountable to the obligations they agreed to under the WTO and General Agreement on Tariffs and Trade (GATT). 

The DSB has developed a creative approach to both give the concerns of the developing nations some teeth and allow them to use TRIPS to their benefit.  Developed nations have a strong incentive to ensure that Intellectual Property (IP) rights are enforced; this is why TRIPS was tied into the package for countries joining the WTO.  Developed nations historically own the bulk of the trademarks, copyrights, and patents.  In order to profit from these revenue streams, they must be afforded IP protection.  Without such protection, the comparative advantage of the inventors/creators is lost to those who can reverse engineer and copy the “technology”. The DSB has provided a remedy for developing nations to enforce their rights under the WTO by “legally” violating their obligations under TRIPS.

Before Cross Retaliation, a country that has received a favorable decision from the DSB would allow the winning country to impose tariffs on the goods imported from the violating country to 1) make up, economically, the damages that were done to them, and 2) encourage the violating country to comply with the decision of the DSB.  The problem with this approach is that a single “David” makes up only a tiny share of a “Goliath’s” exports.  But the reverse may not be true.  A tariff on U.S. goods might substantially raise the price of goods in a developing country’s  economy thereby hampering its own citizens; all without being a drop in the bucket to the bottom line of the offending developed country.  Since tariffs are not an effective way for developing nations to enforce their rights, Cross Retaliation is one way to get the attention of the Developed Nations.

 

How Cross Retaliation Helps

The WTO describes “cross-retaliation as follows: [cross-retaliation] describe[s] a situation where the complaining country retaliates (i.e. suspends concessions or other obligations) under a sector or an agreement which has not been violated by the defending country.”[3]  By allowing developing nations the opportunity to reproduce copyrighted works or manufacture patented items, the developing nation will be able to recover their losses quicker and impact the developing nation’s bottom line.  This remedy by no means levels the playing field but at least gives “David” a weapon that Goliath will feel.

For example, Antigua brought a dispute to the DSB claiming that the United States violated WTO laws with its federal laws and some of the individual state laws by restricting or prohibiting Antigua’s online gaming/ gambling industry.[4]  Antigua could then react by imposing a tariff or a quota on an import from the United States, say corn, but the U.S. corn growers might not even notice the loss in sales.  Additionally, because the US is a major corn supplier to the world, the citizens of Antigua will either have to pay a higher price for corn or not buy corn at all.  This is because there would be less competition supplying it, therefore raising the price.

Cross Retaliation as a remedy has allowed Antigua the opportunity to copy Hollywood’s videos or publish books that are under copyright protection to make up for the lost revenues that would have been achieved from the gambling profits.  This remedy will quickly make up the deficit when enacted by Antigua.  On the other hand, the profits made from copying new movies takes place as fast as the movies can be burned and sold.

The lag in time for recovery in the corn tariff example puts developing countries in an even greater disparity. The second situation though, cross retaliation, allows the developing country to make up the deficit quickly so that the money can be spent to improve the developing countries position.  Additionally, Hollywood producers, investors, and actors will immediately feel the sting of lost sales and therefore have an incentive to ensure their government complies with its WTO obligations and the DSB’s decisions. Lobbying by interest groups who need to be afforded TRIPS protection will act as a second incentive for developed nation’s governments to comply with their WTO obligations.[5]  Therefore, cross retaliation is one of the only options that developing nations can use to persuade compliance of WTO obligations from developed countries.

 

Challenges with the Effectiveness of Cross Retaliation

            Cross retaliation is more effective than tariffs, but there are still a number of obstacles that limit its effectiveness.  The first struggle with cross retaliation comes from the two objectives that should be achieved from retaliation. These objectives are that retaliation inflicts immediate damage to the losing party, and that it should benefit the retaliating country.[6]  In order to achieve the second objective, an “alternative supplier” would need to invest in the start-up costs of the manufacturing.  Then a portion of the profit from the IP right suspension would go to the developing country’s government.  The IP rights suspension might be removed if the losing party begins to comply with their WTO obligations.  If this should happen, the start up costs would be sunk and manufacturing of the suspended license product would no longer be available.  The increased risk that the losing party, the developed country, will comply with the DSB’s decision will ensure that manufactures require more personal profit from the sale of the suspended IP goods.  The unfortunate result is that the developing country does not receive the full value of the remedy that the DSB provided to it. Additionally, there may be less manufacturers that would be willing to even provide services to countries with cross retaliation judgments due to the increased risk that they will never be able to capitalize upon their investment.[7]  Even worse, there may be no manufacturer who is willing to produce under a cross retaliation judgment due to the negative stigma that would be attached to their name.

            The negative stigma concern also goes beyond a manufacturer in a DSB decision case.  In cases where the country is small but a popular tourist destination, like Antigua, the country must build a positive brand image.  Tourists have the option to spend their dollars on a number of vacation destinations.  With negative press in the United States from those lobbyists whose IP rights are now being violated, tourists might be more inclined to choose an alternative vacation destination.  Countries like Antigua rely heavily on tourist dollars to keep their economies going.  A win with internet gambling might still produce a negative sum result because of the loss or tourist dollars. 

            Other “David” countries, like Brazil, may be reluctant to exploit cross retaliation opportunities because of the leverage developed countries have via trade preferences. A major source of Brazilian income is generated because of a Generalized System of Preferences (GSP). A GSP allows an exemption of the WTO’s most favored nation (MFN) status and allows trade with one country to have lower import tariffs than other MFN’s.  Brazil has about $2.5 billion in trade to the U.S. because of their GSP. The U.S. can withdraw trade preferences with Brazil at any time that it wishes because a GSP is a unilateral obligation. [8] Brazil recently won a dispute with the U.S. from a WTO arbitration panel which allows them to receive $295 million upfront[9] and nearly $150 million a year until the U.S. discontinues subsidizing its cotton farmers.[10]  Additionally, Brazil may be able to target the IP rights of U.S. pharmaceutical groups if the subsidies rise significantly beyond their current levels.[11]  Brazil would need to seriously question if enforcing the arbitration panel’s decision would be an economically beneficial move for them.  If the U.S. decided to remove the GSP status, Brazil might lose a good deal of trade.  This special trading provision could be removed if the U.S. feels Brazil is not acting consistent with its wishes.  If the GSP is removed, Brazil would experience a net loss, even though they received a positive ruling from the WTO’s arbitration panel.

            Finally, a country that receives a favorable WTO decision and is afforded the remedy of cross-retaliation can only retaliate against an IP protected product of the offending country.  If, for example, a company like Pfizer was chosen to have their IP protection violated because they had a patent on a drug in the U.S., Pfizer may be able to foil the retaliating countries plan.  Pfizer may be able to transfer the IP rights of the drug to one of its subsidiaries in another country and have that drug no longer available for IP right suspension because it is out of the violating countries IP protection. [12]  There would be an easy solution for this type of action from the WTO, but amendments to a treaty would need to be enacted to make it happen. The WTO could mandate that IP ownership transfers would be prohibited starting on the date that a favorable decision was ordered until the period for recovery expired. The WTO and individual countries should be cautious about issuing such a mandate because the potential ramification of limiting business would severely hamper a free market society.  Plus, there would be many logistical concerns such as the scope and breadth of which IP protections could not be transferred.

 

The Order of Things - Dispute Settlement Understanding of Article 22.3

            A developing nation may not simply win a case with a WTO body and then apply cross-retaliation measures.  There is an order of remedies that the plaintiff must consider or apply before they can get to cross-retaliation.  First, the plaintiff must suspend its concessions in the same commercial sector and under the same agreement (i.e. GATT, GATS, TRIPS, etc.) that was involved in the dispute.  If this remedy is not effective, the plaintiff may seek the DSB’s authorization to suspend its concessions in other commercial sectors under the same agreement.  If this is still not an adequate remedy, the plaintiff can suspend its obligations covered by another agreement. This is considered cross-retaliation.  There is a special provision in the field of Intellectual Property Rights.[13]  If the plaintiff wants to use an IP suspension, it must show that conventional retaliation would lead to damages within the retaliating country itself.[14]

 

Cross Retaliation in Application

            The concept of cross retaliation as a remedy has it benefits, but this remedy often lies unused.  Since the inception of cross-retaliation as a remedy, no country has enacted the suspension of IP rights as a remedy.  There have been two countries awarded the ability to cross-retaliate in the IP field. Ecuador has been awarded cross retaliation against the European Union in a case involving bananas and Antigua and Barbuda have been awarded cross retaliation in an internet gaming case.[15]  Additionally, Brazil has been awarded the possibility to cross-retaliate if the U.S. increases its cotton subsidies above current levels.[16]  Countries may choose to not utilize cross-retaliation because of the negative stigma attached to the decision.  More likely though, developing countries do not enact the decision because of the logistics involved in implementing cross retaliation.  Once the decision is handed down, either from an arbitration panel or the DSB, the developing country needs to determine what sector of industry, within their country, has the capabilities available to manufacture any IP suspended goods.  Ideally, the product(s) that are chosen to be manufactured under the suspended IP protection are products near expiration of their protection period.[17]  After this determination, the country needs to obtain approval from the issuing body and ascertain the amount of IP protection that they may violate to put themselves in the position they would have achieved, had the developed country complied with its WTO obligations. 

Once an amount is determined, the winning party needs to enact local legislation to suspend IP protection for the approved goods for the period of time, or number of items, which would satisfy the harm done to them.  Next, the manufacturer would need to begin manufacturing/ copying the good if the good is a copyrighted item.  If the good is patented, the manufacturer will need to reverse engineer the good.  Additionally, the good will have to be properly and carefully labeled so as to not confuse consumers as to who the true manufacturer is.  Finally, the manufacturing will have to be monitored to ensure that the proper profits go to the appropriate parties and the specified quantities of goods are manufactured in accordance with the case decision. The volume of logistical measures that need to be taken simply to enact the favorable decision makes the remedy of cross-retaliation somewhat prohibitive. 

 

How Does Cross-Retaliation Fall Short?

Cross-retaliation is by far a better remedy for the “David’s” of the world than traditional remedies.  Unfortunately, it is not the best remedy that could be available.  As discussed, there are a number of logistical problems with implementing cross retaliation.  In addition, there is potential for developed nations to retract their trading preferences and the negative press a developing nation could receive that consumers will see.  All of which will hurt a developing nations bottom line.  More importantly, implementing a cross retaliation decision may oblige the country to open a sector of business that either is not comparatively advantageous or sustainable because of market or environmental conditions.  Countries that are not tech savvy will have to set up operations that may require a higher education than their workforce has obtained.

Another problem with cross retaliation is that by its very nature, some party is penalized who gained no benefit from the violation of a WTO provision.  There are a number of public policy reasons why the WTO should not promote this type of activity.  First, this type of cross-retaliation places no incentives upon those receiving a benefit to improve their operations.  For instance, in the case of subsidies to United States cotton farmers; there is no incentive for them to improve their operations because the pharmaceutical companies are subsidizing their actions.  In fact, the pharmaceutical companies are paying for the cotton producers twice.  First, when pharmaceutical companies paid higher corporate taxes to the U.S. Government, who then gave those proceeds to cotton farmers; then in lost sales to the developing countries merchant who now can violate the patent the pharmaceutical company spent so much time researching.  This type of retaliation against one company is unjust.  If one industry is benefiting from an illegal protectionist action by their own government, it is a grave injustice to force one market participant of another industry to bear the burden of correcting that mistake.

In addition to the negative consequences to a single IP holding company, the policy reason for cross retaliation may be thwarted under cross retaliation.  If, for instance, Pfizer’s drug is chosen to have their patent violated, Pfizer itself does not have enough political power to change the U.S. law.  Although Pfizer is a major multinational entity, it does not have enough influence with the U.S. legislature to have the violating policy changed.  Any influence that Pfizer has would be offset by the protected industry’s influence.  These countervailing interests would cancel themselves out and the actions of the violating country would remain unchanged.   The deterrent effect of the remedy would be made moot.  The only remaining benefit to the developing nation would be the profits from the sale of the IP suspended good.

 

Proposed Solution

            Although cross retaliation is an improved solution, there are more practical ways for developing countries to retaliate against a developed country.  If the developed country is subsidizing their own industry, through monetary grants or import tariffs, then the remedy might be to have the amount of that subsidy, times two, paid to the developing countries industry that was hurt by the subsidy for punitive effect. For instance, if the U.S. places a tariff on cotton that came into the country and that tariff was set at five dollars per pound.  For every pound that the developing nation has shipped and continues to ship into the U.S., the manufacturer of that product would receive a check from the U.S. government for ten dollars for every pound that has been exported from the date that the DSB or arbitrator set.  The set rate would both be compensatory for the injured party, and punitive towards the country at fault.  This type of remedy would provide an immediate incentive to the developed country to discontinue their protectionist actions.  Additionally, it would target the industry that was being protected through their government.  The government could then pass those costs along to their domestic industry if it so desired.  This manner of remedy would be optimal in the Ecuador case and the Brazil Case.

            In the Antigua case, there is no internet gambling industry that is being protected by keeping Antigua’s web sites out of the country.  In this case, a more technological approach would be suitable.  Antigua should be allowed to own the rights of its “country code top-level domain”.  This would mean that the country of Antigua and Barbuda would solely be able to assign domain names under the code “.ag”.  This remedy would place the winning developing country in a strong position of power.  Since that country is the only group who could control the actions of web sites under that country code, they could license domain names to users for a fee from which the country could profit. 

The biggest problem with this remedy is that it is an exhaustible remedy.  Meaning that once a country code top-level domain is given to a country from ICANN, it is no longer available in the future as a remedy.  The advantage to this remedy is that citizens would have no problem navigating to the country code of the site that was being blocked and interact with the site, negating any ban that the developing country placed upon the site.  Laws also would have to be in enacted that forbid punishment of citizens who transacted with that country’s “country code top-level domain” websites.  This remedy would, like the previous proposal, not target an individual for profit business.  Instead, the remedy would come from ICANN, a not for profit business.  Additionally, it would provide a strong incentive for the U.S. to comply with their WTO obligations.  Once one country owns their “country code top-level domain” name, it would not be long before other countries wanted to follow suit.

 

Conclusion

Cross retaliation is a powerful tool that can provide a voice for all of the “David’s” in the world.  Unfortunately, the rock that is slung in this circumstance is legitimately too small to even be felt by “Goliath”.  The government of a country is the body that violates a WTO obligation.  This violation may come at an industry’s pleading, but ultimately the government is responsible for its actions.  Therefore the government is the party that should pay the price for breaking their WTO obligations.  Cross retaliation forces the penalties from developed countries actions on the back of an individual company.  Although cross retaliation does have teeth, it might be biting the wrong person.

  

---

[1] The U.S.A.’s GDP adjusted for Purchasing Power Parity is 14.29 Trillion vs. Antigua and Barbadian’s GDP (adj. for PPP)  estimated at 1.61 Billion according to the CIA World Fact Book at www.cia.gov/library/publications/the-world-factbook (September 2, 2009)

[2] F.A. Hayek, The Road to Serfdom 80 University of Chicago Press 1994 1944

[3] Hong King Ministerial 2005: Briefing Notes, Force of Argument, Not Argument of Force, (Sept. 2, 2009) at http://www.wto.org/english/theWTO_e/minist_e/min05_e/brief_e/brief10_e.htm

[4] Catherine Saez, Intellectual Property Watch,  Company Pushes Debate on Implementing WTO TRIPS Cross-Retaliation, http://www.ip-watch.org/weblog/2009/09/03/company-pushes-debate-on-implementing-wto-trips-cross-retaliation/ (Sept. 3, 2009)

[5] Institute for Agriculture and Trade Policy, (Pub. Sept. 2006) Strengthening Compliance at the WTO, at http://www.iatp.org/iatp/publications.cfm?accountID=451&refID=89107 (Sept. 3, 2009)

[6] Maristela Basso & Edson Beas, Cross-retaliation through TRIPS in the Cotton Dispute, Bridges, No. 5 May, 2005 at 19 at http://www.iatp.org/iatp/publications.cfm?accountID=451&refID=89107

[7] Id.

[8] Institute for Agriculture and Trade Policy, (Pub. Sept. 2006) Strengthening Compliance at the WTO, at http://www.iatp.org/iatp/publications.cfm?accountID=451&refID=89107 (Sept. 3, 2009)

[9] Frances Williams, FT.com, Brazil wins WTO go-ahead for US sanctions, http://www.ft.com/cms/s/0/a583eb44-9658-11de-84d1-00144feabdc0.html (Sept. 3, 2009)

[10] Peter Fritsh & John Lyons, online.wsj.com, U.S. Loses Ruling on Cotton Payouts, http://online.wsj.com/article/SB125172597900172461.html (Sept, 3 2009)

[11] Id.

[12] Shamnad Basheer, spicyipindia.blogspot.com, Turning Trips on its head: Cross Retaliation at the WTO, http://spicyipindia.blogspot.com/2008/02/turning-trips-on-its-head-cross.html (Sept. 3, 2009)

[13] WTO Analytical Index: Dispute Settlement Understanding,  http://www.wto.org/english/res_e/booksp_e/analytic_index_e/dsu_08_e.htm#article22 (Sept. 3, 2009)

[14] Id. at Cross-retaliation through TRIPS in the Cotton Dispute at http://www.iatp.org/iatp/publications.cfm?accountID=451&refID=89107

[15] Id. at  http://www.ip-watch.org/weblog/2009/09/03/company-pushes-debate-on-implementing-wto-trips-cross-retaliation/

[16] Peter Fritsh & John Lyons, online.wsj.com, U.S. Loses Ruling on Cotton Payouts, http://online.wsj.com/article/SB125172597900172461.html (Sept, 3 2009)

[17] Id. at Cross-retaliation through TRIPS in the Cotton Dispute at http://www.iatp.org/iatp/publications.cfm?accountID=451&refID=89107

The Investment in US Based Software Patents By German Firms: An Exploratory Empirical Study

THE INVESTMENT IN US BASED SOFTWARE PATENTS BY GERMAN FIRMS: AN EXPLORATORY EMPIRICAL STUDY

Submitted by Kathleen Mykytyn

Introduction

            Advances in distribution technologies have made a significant contribution to the delivery of goods and services throughout the world.  In this global environment, information technology, in the form of management information systems (MIS), has created efficiencies that have helped business entities achieve competitive advantages.  Information that can be communicated rapidly and securely has lead to the development of MIS business processes for internal use within the confines of a business.

            Computer software developed for internal use requires investment in time and money to ensure that the system does what it is supposed to do.  One problem facing this software investment is the fear that if the software cannot be protected, it may be copied by a competitor, thus diminishing possible competitive advantage.  Fortunately, to alleviate this problem, the United States Patent and Trademark Office (USPTO) includes a class that allows business process software to be patented and, therefore, be safe from copying for a number of years.  Currently, this classification in the USPTO is Class 705 Data Processing: Financial, Business Practice, Management, or Cost/Price Determination[1].

While these business method patents have been regularly granted in the US, the European Patent Office (EPO) does not grant patents for computer programs or computer-implemented business methods that make no technical contribution, i.e. inventions that use a computer program to provide a business process, not a technical process, are not patentable[2].

            Due to the acceptance by the court of a so-called business method patent, thousands of these types of patents have been granted to firms that use them for internal use, i.e. they are not for sale to the general public.  In fact, the broader and more inclusive patent classification, class 705, was created in the late 1990’s by the USPTO that has led to the large numbers of such software patents.

            The issuance of such patents by the EPO is not as broad as in the US.  If the EPO is unwilling to grant business method patents, where would a foreign corporation go to protect a valuable software asset?  Consequently, an exploratory empirical study was conducted in Germany to determine why a German corporation would seek software patent protection in the US.

            In the next section, a review of the background of business method patents and their impact in businesses is discussed.  Following that, the methodology for the study is presented.  Next, a discussion of the findings will be provided.  The paper concludes with a short analysis of the differences between large and small companies and their desire to gain software patent protection in the US.

Literature Review

            The USPTO is the United States (US) agency that oversees the application process and issuance of patents applied for in the US.  Many of its responsibilities are similar to those of the EPO that is responsible for individuals and companies seeking patent protection in more than 30 European countries (www.epo.org).  Similarly, the German Patent and Trademark Office (www.dpma.de) is responsible for industrial property protection which encompasses patents, trademarks, utility models, and design registration.  Its responsibilities are broader than those of the EPO.

            At first thought, some might suggest that the USPTO should issue patents only on such devices as the design of a chair, means of electrical transmission, drugs, or a process to treat metal.  The thought of issuing a patent on computer software may be contrary to some views on just what should be eligible for patent protection.  Until 1981, patent protection for software was almost non-existent.  At that time in a landmark case, the Supreme Court held that some software could be patented[3].  This holding opened the door to businesses that wanted to protect their investments in business method software by offering protection for a limited time.

Also, being able to use that software without fear of infringing another business’ patent was comforting.  Bresnahan probably stated it best by noting that a company’s most important business process or innovation could not be used because a competitor’s attorney had figured out a way to patent it[4].  Cantzler emphasizes this point, stating that competitors are using software patents to gain a business advantage, so you should do so too[5].

            During the 1980’s, actions were taken by the government to strengthen and revitalize the patent system.  This revitalization has come with legislation – much of it intended to curb infringement – and, more significantly, with the creation of the Court of Appeals for the Federal Circuit (CAFC) in 1982 which has been granted exclusive jurisdiction over patent appeals[6].  The impact the CAFC has had on patent prosecution through enforcement was studied by Merz and Pace[7].  Using data for the period from July 1971 through December 1991, they questioned whether patent litigation had also increased since the CAFC increased enforceability.  Their results indicated that a significant increasing trend in litigation occurred sometime after April, 1982.  This may be due in part to the creation of the CAFC and a more patent friendly environment.  Further, they theorize that the increase in enforceability and, thus, the value of patents may explain the dynamic increase in patent application filings.

Businesses both foreign and in the US that are utilizing patent protection for business methods have grown rapidly.  Examples of businesses in the US that have made use of the business methods patent include:

1.      American Airlines’ SABRE system[8]

2.      Merrill Lynch’s Cash Management Accounts System[9]

3.      Mrs. Fields, Inc. integrated management and reporting systems[10]

In 1982, Merrill Lynch, Fenner & Smith Incorporated (Merrill Lynch) received a patent on its Cash Management Accounts System (CMA)[11], a system designed to improve securities broker/cash management activities relating to an investor’s brokerage account, money markets, checking account, etc.  The validity of this business method patent was challenged in 1983 by Paine, Webber, Jackson and Smith[12].  The argument was that the CMA system was nothing more than a business method that could be done by telephone and a paper and pencil, which, Paine said, could not be patented.  The court upheld the validity stating that the patent claims “…allegedly teach a method of operation on a computer to effectuate a business activity[13].  Although Paine wanted to pursue the validity issue, the patent-friendly CAFC thwarted their efforts and Witter, the third party defendant finally settled with Merrill Lynch for a million dollars[14].

            Notwithstanding someone questioning the applicability of business methods computer software being afforded patent protection, the fact remains that there are thousands of patents on computer software that have been, and continue to be, issued by the USPTO.  One can find similar results in terms of granting of software patents by the EPO and the German Patent and Trademark Office.  The issuance of software patents by the USPTO is one perspective of this research.

            Another perspective concerns just who applies for and is awarded software patents by the USPTO.  Again more from a simplistic perspective, one might think that since the USPTO is an organization affiliated with the US Government, it would be logical to presume that persons or organizations from the US would be the only recipients of these patents[15].  Such is not the case.  In fact, software patents, as well as patents in general, can be awarded to organizations from throughout the world.  For example, as of April 6, 2009 the USPTO has awarded patents in class 705 (the numbers in parentheses following each country name are the number of patents awarded in that class..) to individuals and/or organizations from Japan (2,333), Taiwan (88), France (203), Germany (310), and Great Britain (188)[16].  Of course, this represents a very small number of the total patents, software or other types, awarded to non-US individuals or organizations.  It is also important to understand that the EPO as well as the German Patent and Trademark Office, along with many other countries, award patents of all types, including those for software.

            If an organization can apply for and obtain a patent in its own country, why would that organization seek to obtain a patent for the same invention in another country or jurisdiction?  More specific to the current research, why do non-US entities seek to obtain patents on computer software from the USPTO?  Perhaps a reason rests with research presented by Meyer who cited four reasons that could provide a motivation to obtain patent protection for software[17].  They are:  (1) to reduce the competition for products that embody their inventions; (2) to use a patent primarily as a tool for any additional licensing revenue the patented software can provide; (3) to develop a defensive portfolio of patents to use in negotiations with competitors, potential business partners, or other patent holders, i.e., “bully power; and (4) to legitimize their technology to their clients and/or investors.  Or perhaps an organization may seek such protection that is more closely aligned with its strategic focus or direction.  After all, the global business arena today coupled with the emergence of all types of e-business may cause an organization to have a different viewpoint than the reasons suggested by Meyer[18].

Methodology

The research outlined in this paper is an initial step to try to shed some light on why non-US organizations seek protection for software-related inventions from the USPTO.  More specifically, this exploratory research involves semi-structured interviews involving three German organizations that have obtained numerous software-related patents during the past several years.  Analysis of the interview data is expected to lead to a model that would provide greater understanding and, potentially, predicting why such efforts are made by German firms.

This study has two purposes.  First, it is designed to explore several perspectives surrounding patent protection for computer software.  Second, it seeks to determine whether the reasons outlined by Meyer to obtain software patents are motivators for German organizations [19].

The three German firms selected to participate in this study had obtained at least one patent from the European Patent Office and/or the United States Patent and Trademark Office related to computer software.  It is realized that a firm may have many software patents assigned to it, but in the first part of this study, the research is only interested in any software patent assigned to the firms that relates as closely as possible to some business activity or process.  Two examples for this type of application would be a system that carries out payments in a computer-based network and a system that supports the processing of invoices.  Other types of applications are certainly possible.  The focus of the software can be internal within the organization or external, relating to customers, suppliers, and so on. 

Since anonymity was required by the participants of the three businesses, their names, or their businesses cannot be divulged.  For the reader’s enlightenment, a description of the three firms is located in the Appendix.

 

The variables examined in the semi-structured interviews are:

1.      Protection

a.       Exclusive right to exclude others from making, using, selling, offering to sell, or importing the invention and the right to license others to make, use, or sell the invention[20]

2.      Competitive advantage

a.       A portfolio of patented software applications that encompass the depth and breadth of actions a company takes can make it more difficult for its competition to respond to these actions.

3.      Strategic necessity

a.       Must maintain technological parity with competitors, whether by license or in-house development.

4.      Financial gain

a.       Financial gain may be achieved directly through licensing or indirectly by providing customers with better/easier access to goods or services than ones competitors

5.      Ability to conduct business without threat

a.       A strong patent portfolio ensures that the software will be available for continued use.

Preliminary Data Results

            Each of the variables will be listed in a table with the businesses.  “I” indicates that a variable is important to the business. “U” indicates that the variable is unimportant and “VI” indicates very important.  Comments are addressed if they lend more understanding to a business’s decision to patent.

Variable	Company A	Company B	Company C
Protection	VI	I	I
Competitive advantage	I	VI	I
Strategic necessity	U	VI	VI
Financial gain	I	VI	I
Conduct business without threat	VI	I	VI

 

            The data indicate that in the two smaller companies, protection was important.  These businesses were in a narrow, specialized market.  The industry in which the company competes is small and Company A believes that it must protect itself against the other companies in its industry.  Accordingly, Company A can and does use its software patents that are integrated in its products in such a way that the company is able to find a niche for itself and, thus, protect itself from its competitors who might also seek to obtain the same niche if Company A did not obtain a patent on its products fitting within that niche.  Likewise, Company C regards patent protection more from a protective perspective in dealing with its competitors.  Company C’s senior management plays an important role in determining whether the Company applies for and seeks patents on its software-based inventions.

            Company B does place significant value on its patent portfolio and does consider that it provides the Company with a competitive advantage.  In this regard, Company B does examine the relationship between its patent portfolio, its expenditures in R & D, and its sales volume and that of its competitors.  Companies A and C, as smaller companies, believe that their “personal touch” and service is their most important asset.

            Company C believes that integrating software-based solutions into its systems, as opposed to some competitors that develop hardware-based solutions, is a much more attractive business model.  At the same time, Company C believes that obtaining software-based patents in the United States enables them to keep up with changing business conditions in the US.  Software-based systems also provide more flexibility for Company C as one of its strongest assets is its ability to react quickly to changing industry environments.  Company B’s intellectual property group works closely with the Company’s business units in terms of intellectual property strategies; in fact, Company B’s intellectual property group is the driving force behind its patent portfolio, although it is clear that the business units understand the importance of the portfolio and lend good support to the intellectual property group.  Because they are concerned with maintaining their standing in their industry, they work closely with firm attorneys who perform patent searches to determine what can or should be patented.

            Financial gain was important for all three companies, but was very important to Company B.  Company B said that they would consider trading some form of intellectual property with a competitor, but it was not a major part of their business model.  Company B does consider its vast patent portfolio as a means to work with businesses both large and small.  As might be expected, if another company with a smaller patent portfolio than that of Company B wanted to do business with Company B, it might have to contribute more to the business partnership than a different company with a more extensive patent portfolio would have to.  Both Company A and C have licensed in the past, but were unclear as to the particulars – it was not considered important to their financial gains.

            Both Company A and C considered patenting in the US very important because they did not have the wherewithal to fight a large corporation.  One interviewee stated that one of their major competitors has more attorneys than they have employees.

 

Conclusion

            What has been learned from this preliminary examination of software patents is that in this global economy, software is very much a necessity in the successful conduct of business.  One interesting aspect of this study was the fact that all three German companies worked closely with legal counsel as part of their business model.  As with many firms in the US, their MIS departments help plan patent strategies for their software related business processes and/or products.

While some software development can be outsourced, software developed for internal use or software embedded in their products, was conducted in house.  Company C stated that a large technical university is located in the same city which can provide the Company with programmers and software developers that Company C may need.

Further research is needed to examine other countries and their activities involving software patents and their attitudes towards them.  There is no doubt that software, whether embedded or not, is necessary in the global marketplace.  It might be beneficial to form a consensus as to how and what software can be patented.

 

Appendix

Company A:

Company A is located in a suburban part of one of Germany’s largest cities.  The company is a manufacturing company that is a major player within Germany in terms of its industry.  Its industry is highly regulated worldwide, is small with very few competitors, but all competitors compete on a worldwide basis.  Company A is perhaps the smallest of all of the companies that compete in this industry.  Its main competitors are in France and the United States.

            Company A has a modest size patent portfolio that involves software patents obtained in Germany, the European Union, and the United States.  For the most part, software patents obtained by Company A involve software that is integrated into devices, components, or products.  The Company does not generally seek to obtain so-called business method patents. 

Company B:

Company B is located in one of Germany’s largest cities.  The company is considered to be one of the largest companies in Germany, and it is involved in a varied number of industries, including electronics and engineering.    It competes on a worldwide basis, and it is a leader in several of its activities.  Its competitors come from different parts of the world, and as large as Company B is, its competitors will vary in location.

            Company B has an extensive patent portfolio that involves software patents obtained in Germany, the European Union, and the United States.  For the most part, software patents obtained by Company B involve software that is integrated into devices, components, or products.  The Company does not generally seek to obtain so-called business method patents, but they do have a few.

Company C:

Company C is located in a midsize city in Germany.  Company C develops software-based systems for varied industrial clients located around the world.  Although the Company might be considered small in terms of sales revenue and employees, Company C is a world leader in its industry.  Company C conducts its business with other businesses only; it does not sell to consumers.

            Company C has a small patent portfolio that involves software-based patents in Germany, the European Union, and the United States.  Software patents obtained by Company C involve software that is integrated into systems that are used by Company C’s industrial clients.  In dealing with its competitors, Company C believes that integrating software-based solutions into its systems, as opposed to some competitors that develop hardware-based solutions, is a much more attractive business model.  At the same time, Company C believes that obtaining software-based patents in the United States enables it to develop systems, applications, and methodologies easier than in either Germany or the European Union.  Software-based systems also provide more flexibility for Company C as one of its strongest assets is its ability to react quickly to changing industry environments.

---

[1] www.USPTO.gov

[2] www.epo.org

[3] Diamond v. Diehr, 450 US 175, 1981.

[4] J. Bresnahan, “Choose Your Poison,” CIO Magazine, 13/3, 2000, p. 132-140.

[5] C.S. Cantzler, Spring Comment, “State Street: Leading the Way to Consistency for Patentability of Computer Software,” Colorado Law Review, 71, 2000, p. 423-461.

[6] J.F. Merz & N.M. Pace, “Trends in Patent Litigation: The Apparent Influence of Strengthened Patents Attributable to the Court of Appeals for the Federal Circuit,” Journal of the Patent and Trademark Office Society, 76, 1994, p. 579-590.

[7] Id.

[8] E.W. Marten, D.W. DeHayes, J.A. Hoffer, & W.C Perkins, Managing Information Technology, Macmillan Publishing Company, New York, 1994.

[9] Id.

[10] G. Senn & J.E. Retsky, “Patent and Trade Secret Protection of Computer Technology,” Software Law Journal, 6, 1993, p. 239-271.

[11] Merrill Lynch, Pierce, Fenner & Smith, New York, NY, August 24, 1982, Securities brokerage-cash management system. United States Patent #4,346,442.

[12] Paine Webber, Jackson and Curtis, Inc. v. Merrill Lynch, Pierce, Fenner & Smith, Inc. 564 F. Supp. 1358, D. Del. 1983.  In this case, Merrill Lynch tried to add Dean Witter as a third party defendant because a former programmer of Merrill Lynch had gone over to Dean Witter and proceeded to program their system with the CMA program owned by Merrill Lynch.  Merrill Lynch thought that if the CMA patent was held to be valid, that they could then get Dean Witter for infringement, i.e. kill two birds with one stone.  The court would hear none of it, ruling that this case was only about patent validity and that they would have to file for infringement in another case.

[13] See Paine, supra note 3, at 1369.

[14] N.Y. Times, Dec. 28, 1983, Lake City final edition, Section D, p. 4.

[15] In the United States individuals and organizations can be awarded a patent on some invention.  However, this research focuses strictly on organizations, and any discussions related thereto should not be construed as being applicable to individuals.

[16] USPTO, 2009.

[17] S.P. Meyer, “Obtaining and Enforcing Patents for Software-Related Inventions: Avoiding the Pitfalls,” Software Law Journal, 5, 1992, p. 715-738.

[18] Id.

[19] Id.

[20] M.A. Voet, “Patent Practitioners – Don’t let GATT get you,” Managing Intellectual Property, 47, 1995, p. 20-25.

INTELLECTUAL PROPERTY, GLOBALIZATION & DEVELOPMENT: WHAT IS IP’S RELATIONSHIP WITH HUMAN RIGHTS? SHOULD IT BE OVERCOME BY HUMAN RIGHTS SUCH AS RIGHT TO MEDICINE? OR IS IP ITSELF A HUMAN RIGHT THAT SHOULD BE PROTECTED?

 

                                                BY

 

 

                                    AISHA OYAREKHUA

 

 

 

INTRODUCTION

From time immemorial a lot of importance has always been attached to property being one of the oldest institutions of human civilization. The philosophical bases for protection of private property are well entrenched in most cultures where it is widely recognized that people may real property and tangible objects. The Common law, Civil law and most constitutions in various countries protects private properties against takings by government or other individuals without just compensation.[FN1] The early enlightenment theories claim that property rights emanated from natural rights of man. The philosopher John Locke stated that “Though the earth and all inferior creatures be common to all men, yet every man has a ‘property’ in his own ‘person’. This nobody has any right to but himself.The ‘labour’ of his body and the ‘work’ of his hands, we may say are properly his.Whatsoever then he removes out of the state that nature hath provided and left it in, he hath mixed his labour with it, and joined to it something that is his own and thereby makes it his property…”. [FN2] This view of absolute private property centered on an individual has however been largely criticized.

Legal protection for intellectual property evolved much later in the development of human society and its importance cannot be over emphasized. IP has become very significant in international transactions and the rights derived from IP has become one of the hottest topics in debates around the world with diverse views, opinions and perspectives from different countries and interest groups. Some of the major topics include whether strong IP rights will forestall innovation?, infringe on fundamental human rights ?or further impoverish under developed and developing countries. The developed countries like the United States and Japan are clamoring for higher protection for IP rights while the developing countries are resisting stronger IP rights as they believe this will make them subservient to the developed countries because they do not have enough knowledge, funds and technology to make inventions that can be protected by IP rights. This paper attempts to show the relationship between IP and human rights and some of the arguments on both sides.

 

DEVELOPMENT OF INTELLECTUAL PROPERTY LAW

Like most areas of international law, the basic principle governing international relations in the field of intellectual property is territoriality. Each nation’s intellectual property law has effect within that nation’s boundaries but have little effect outside them; because of this principle of territoriality there is actually little “international law” in the field of intellectual property. However there are a good number of treaties and international conventions by which different nations obligated themselves to provide intellectual property protection for the benefit of foreign nationals and observe certain minimum norms of protection.

The oldest and most important multilateral treaty on intellectual property is the International Convention for the protection of Industrial Property originally signed at Paris in 1883, and better known as the Paris Convention, which covers patents, industrial designs, trademarks, trade names, service marks, collective marks and unfair competition. Virtually all the world’s industrialized and many developing countries are parties to it.

The most patent related matters dealt with in the convention concerned national treatment, the right of priority, and rules relating to local manufacturing. National treatment is the right of foreign citizens to be treated the same as nationals with respect to legal rights and remedies. National treatment was and continues to be one of the pillars of international intellectual property law. Since 1883 the Paris convention has been revised six times, most recently in 1967, and its membership has expanded tremendously including countries which joined in large numbers during 1960s and 1970s. [FN3]

In the late nineteenth century following the vast output of literary and artistic works in countries like France and Britain, authors became victims of large scale copying in foreign countries and the government of these countries were reluctant to give foreign authors and artists equal treatment under the law. Like the Paris convention the initiative to produce a multilateral treaty was taken by those who stood to benefit directly from enhanced international protection of literary and artistic works, in this case authors, publishers, lawyers and representatives of literary and publishers societies. This led to the Berne convention for the protection of literary and artistic works, which was adopted at a diplomatic conference in 1886 by representatives of Germany, Belgium, France, UK, Tunisia, Spain, Italy, Liberia, Haiti and Switzerland. The United Staes and Japan were represented by observers.

The main tenets of the Berne convention are national treatment, minimum levels of protection for the author, and the removal of any dependence on registration or other formalities in order to enjoy and exercise rights provided. Since 1886 the Berne convention has also been amended six times to keep pace with the emergence of new technologies. The United States however did not become a part of the convention until 1989.[FN4]

A major weakness of the Berne convention was the limited nature of its application to authors and not owners of related rights such as performers, film producers and broadcasters. These parties finally obtained international rights regime under the 1961 Rome convention for Protection of Performers, Producers of phonograms and Broadcasters.

Challenges to existing methods of international intellectual property law making are becoming more prevalent and more pointed. These challenges increasingly target the 1994 Trade Related Aspects of Intellectual Property Rights Agreement (TRIPS) which unfolded into the World Trade Organization (WTO) an enhanced set of patent, copyright, trademark and other private rights of intellectual property owners. Unlike prior intellectual property agreements which were limited to a set of rules with anemic enforcement, TRIPS contains detailed comprehensive substantive rules and is linked to the WTO’s comparatively hard edged dispute settlement systems in which treaty bargains are enforced through mandatory adjudication backed up by threat of retaliatory sanctions.[FN5]

 

RELATIONSHIP BETWEEN IP AND HUMAN RIGHTS

International law recognizes that there is a relevant nexus between human rights and intellectual property. As a type of property right, intellectual property rights are within scope of human rights but, IP rights are private rights which are owned by a group of people, while human rights are universal and enjoyed by people all over the globe, thus conflict between both are unavoidable.

The human rights system as embodied in the Universal Declaration on Human Rights (UDHR), the International Covenants on Civil and Political Rights (ICCPR) and on Social, Economic and Cultural Rights (ICESCR) and the various regional and thematic instruments can be considered a global agreement of common ideals and shared values, committing states by international customary or treaty law. It has vitally contributed to shaping the world order after the Second World War, thus providing an adequate basis to deal with the far-reaching changes the establishment of the information society is about to bring.[FN6]

The relationship between intellectual property and human rights as laid down in Article 27 of the UDHR and Article 15 of the ICESCR is twofold. Both articles provide for “the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author”, but at the same time “everyone has the right freely to participate in the cultural life of the community, to enjoy the arts and to share in scientific advancement and its benefits”. This embraces the authors’ rights to the protection of their work from unauthorized use as well as the public’s right to benefit from scientific and cultural progress.[FN7]

 However with the rise of the information society, the need to recover the highly sensitive balance between these two human rights has become necessary, considering both economic and social interests.

 

RIGHT TO MEDICINE

Prior to the TRIPS agreement, the emphasis in international IP had been on providing affordable drugs to poor developing countries; but the TRIPS agreement introduced minimum standards for IP protection for all WTO members. The implication of these minimum standards was the possibility that drug companies could increase drug prices and poor countries would not be able to afford it. This caused a lot of conflict between patent rights and the urgent need for access to affordable drugs especially in nations that are experiencing an AIDS crisis. There is now a general consensus that there is important to balance the need for IP rights and the need for access to affordable health care. [FN8]

 This and other human rights issues made the U.N human rights system to pay more attention to TRIPS in 2000. The sub-commission on the Promotion and Protection of Human Rights declared that” there are apparent conflicts between the intellectual property regime embodied in TRIPS Agreement…. and international human rights law” [FN9] It saw negative effects in the following areas:

1. technology transfer to developing countries
2. the consequences for the right to food of plant breeder’s rights and patenting of genetically modified organisms
3. bio piracy
4. impact on the right to health from restriction on patented pharmaceuticals
5. control of indigenous communities’ natural resources and cultural values

This declaration called on a wide array of actors which includes governments, intergovernmental organizations, including WIPO, the World Health Organization, the United Nations Development programme, United Nations Conference on Trade and Development and NGOs to take up a critical examination of TRIPS.5 As a follow up of this declaration, the High Commissioner for Human Rights offered a critical examination of the Trips Agreement and provided the following observations:

(a)    TRIPS Agreement is geared towards promoting innovation through the promoting innovation through the provision of commercial incentives thereby making issues of public health, nutrition, environment and development exceptions to the rule rather than being the guiding principles themselves.

(b)   Although TRIPS identifies the need to balance the rights with obligations, it however leaves no guidance as to how to achieve this balance.  

(c)    Thirdly, because of the required minimum standards, the TRIPS Agreement has taken away a high degree of autonomy and this lack of autonomy in turn, may affect the State’s right to development.

(d)   The protection contained in TRIPS Agreement focuses on forms of protection that has developed from industrialized countries and as a result less developed countries are required to offer protection that does not take into account their local needs, interests and conditions.

(e)    Limited attention has been devoted to the protection of “cultural heritage and technology of local communities and indigenous people especially the growing concern about the use of pressure to impose the TRIPS-plus Agreement which could result in IP systems that are inconsistent with State’s responsibilities and human rights law.[FN10]

The UN declaration also led to the adoption of the Doha declaration in November 2001, which recognizes the gravity of public health problems on developing countries especially those resulting from HIV/AIDS, malaria, tuberculosis and other epidemics. It affirmed that the TRIPS agreement should be interpreted and implemented in a manner supportive of WTO’s members’ right to public health and in particular promotes access to medicine.[FN11]

The declaration allows any member state in need of generic drugs to have access to them under compulsory licensing. Compulsory licensing refers to the practice by a government to authorize itself or third parties to use the subject matter of a patent without the authorization of the right holder for reasons of public policy.[FN12] The purpose is to alleviate epidemics in developing countries that cannot manufacture their own medicines. Pharmaceutical companies however have legitimate concerns about this declaration as there is neither legal qualification to prevent abuse nor are there clearly defined grounds for compulsory licensing.[FN13]

A few years after the release of the High Commissioner’s Report, the Committee on Economic, Social and Cultural Rights issued an authoritative interpretive comment on article 15(1)(c) of the International Covenant on Economic, Social and Cultural Rights (ICESCR); a provision that requires each State party to the covenant to recognize the “right of everyone to benefit from the moral and material interests resulting from any scientific, literary or artistic production of which he (or she) is the author”. As the comment stated:

“Ultimately, intellectual property is a social product and has a social function .States parties thus have a duty to prevent unreasonable high cost to access to essential medicines, plant seeds or other means of food production, or to schoolbooks and learning materials from undermining the rights of large segments of the population to health, food and education. Moreover, States parties should prevent the use of scientific and technical progress for purposes contrary to human rights and dignity, including right to life, health, privacy, e.g. by excluding inventions from patentability whenever their commercialization would jeopardize the full realization of these rights” [FN14]

According to the interpretative comment, the private right of authors should not be unduly favoured and the public interest in enjoying broad access to their production should be given due considerations.

 

BIO-DIVERSITY

Another way in which IP rights conflict with human rights is in the area of conflict is Bio diversity (CBD). The Convention on Biological Diversity which many less developed countries are parties to have as part of its objectives “the conservation of biological diversity, the sustainable use of its components and the fair and equitable sharing of benefits arising out of the utilization of generic resources”

Professor Laurence Helfer has explained that the origin of the convention stemmed from the diverging positions taken by developed and less developed countries. He stated that why “bio-diversity rich but bio-technology poor developing countries sought financial benefits for technology transfers and as incentives to conserve rather than exploit the generic resources within the borders; bio-diversity poor but bio-technology rich industrialized states sought to minimize the benefits and transfers while maximizing access to those resources”.[FN15]

Article 8(j) of the CBD provides:

“….respect, preserve and maintain knowledge, innovations and practices of indigenous and local communities embodying traditional lifestyles relevant for the conservation and sustainable use of biological diversity to promote their wider application with the approval and involvement of holders of such knowledge, innovations and practices, and encourage equitable sharing of the benefits arising from the utilization of such knowledge, innovation and practices”.

The conflict in executing both the TRIPS agreement and the CBD convention arises from the above provision. The CBD allows developed CBD States to transfer technology to less developed countries on terms consistent with effective protection of IP rights. NGOs have expressed concern about the adverse effects of the TRIPS agreement on the CBD and have sought to harness intellectual property rules by promoting compliance with the convention.

The less developed countries have proposed that patent applicants should disclose their compliance with access and benefit-sharing requirement under the relevant natural laws. Although it has been opposed by developed countries like Japan, expressing fear that it would destabilize the existing international patent system. The benefits of the proposal if approved includes:

1. It will promote coherence between policies that seek to implement the CBD and the TRIPS agreement.
2. It will develop a linkage between the TRIPS agreement and the CBD, thereby encouraging members that are not yet parties to join.
3. It will help safeguard the protection of the intangible cultural heritage of more than 100 countries that are now parties to the convention.[FN16]

 

RIGHT TO FOOD

Food and Agriculture is another area of intersection between human rights and IP rights. On the one hand there are strong interest groups advocating for incentives to protect plant breeders and rules that affect ownership and transfer of plant generic resources; while on the other hand there are serious concerns about the need for farmers to re-use seeds. After years of contentious negotiations a new international treaty on Plant Generic Resources for Food and Agriculture was adopted. The treaty recognizes:

“the enormous contribution that the local and indigenous communities and farmers of all regions of the world particularly those in the centers of origin and crop diversity, have made and will continue to make for the conservation and development of plant and generic resources which constitute the basis of food and agricultural production throughout the world”

The treaty further requires member States to “establish a multilateral system which is sufficient, effective and transparent. Although the new treaty struck a compromise by recognizing intellectual property rights in some plant generic resources while promoting free access to others such as raw plant generic resources and those in International Seed Banks, the enormous push for farmers’ right is likely to boost the protection of traditional knowledge and cultural expression.[FN18]

 

 

RIGHT TO INFORMATION

With the emergence of the internet and other communication technologies, WIPO has taken interest in information and communication as intellectual properties. It is working on developing internet treaties, but much more than that it emphasized at the World Summit on the Information Society (WISS) held in Geneva in 2003; the widening digital gap between developed and less developed countries and global importance of access to information and knowledge. Paragraph 42 of the Geneva Declaration provides:

“Intellectual property protection is important to encourage innovation and creativity in the information society. Similarly, the wide dissemination, diffusion and sharing knowledge is important to encourage innovation and creativity, facilitating meaningful participation by all intellectual property issues and knowledge sharing through full awareness and capacity building is a fundamental part of an inclusive information society”

Although it is necessary to have IP laws to protect and regulate information and communication, the focus really should be on bridging the widening digital gap between developed countries and developing countries.

By advocating these human right of access, IP skeptics seek to create a conflict with intellectual property rights, which give their owners the right to control and exclude others: from medicine, in the case of pharmaceutical patents, and from knowledge in the case of copyright. Since advocates view “human rights obligation” as having “primacy” over economic policies and agreement, then it should naturally follow that intellectual property rights are secondary, to be treated as limited exceptions. [FN19]

 Helfer has also identified two approaches to the human rights-intellectual property interface. The first approach views human rights and IP as being in fundamental conflict. This framing he says sees IP protection as undermining and therefore incompatible with a broad spectrum of human rights, especially in the area of economics, social and cultural rights. Proponents of this approach are advocating that the way to resolve this conflict is to recognize the normative supremacy of human rights law over intellectual property law in areas where they conflict.

The second approach sees both areas of law as concerned with the same question: defining the appropriate scope of private monopoly power that gives authors and inventors a sufficient incentive to create and innovate, while ensuring that the consuming public has adequate access to the fruits of their efforts. This school of thought views human rights and IP law as essentially compatible, although often disagreeing over where to strike the balance between incentives on the one hand and access on the other hand.[FN20]

This second approach relates to the TRIPS Agreement, it has been argued that trade negotiators were largely unaware of the possible repercussions when the issue of intellectual property rights was linked with global trade during the Uruguay round trade negotiations that culminated in the 1994 Agreement establishing the World Trade Organization, annexed to which was the TRIPS Agreement. Far more attention was paid to the need to satisfy pharmaceutical and entertainment industries than to ensure an intellectual property regime that was good with human rights in the areas of health, education, access to information, food, security and general interests of developing countries. [FN21]

TRIPS proponents like the United States, Japan and the European Communities argue that a uniform set of relatively high standards of protection fuels creativity and innovation attract foreign investment and encourage a more rapid transfer of technology. These proponents defend TRIPS as part of the WTO package deal in which developing countries receive freer markets of industrialized nations in exchange for their agreement to protect the IP rights of foreign nationals.[FN22]

According to Nobel laureate in economics, Joseph E. Stiglitz:

“I suspect that most of those who signed the agreement did not fully understand what they were doing .If they did would they have willingly condemned thousands of AIDS sufferers to death because they might no longer be able to get affordable generic drugs? Had the question been posted this way to parliament around the world I believe that TRIPS would have been soundly rejected” [FN23]

Stiglitz noted that although IP is important, but the appropriate IP regime for a developing country is different from that for an advanced industrial country; TRIPS failed to recognize. In fact IP should never have been included in a trade agreement in the first place, at least partly because its regulation is demonstrably beyond the competence of trade negotiators.[FN24]

Robert Sherwood has also made some observations about the TRIPS Agreement, firstly, that the agreement is largely irrelevant to what really matters in developing countries; this is because intellectual property was seen as a bargaining chip instead of being analyzed as part of a country’s infrastructure for economic development. In his research he observed that there are inventive people everywhere but that these natural resources can only be mobilized where the national intellectual property system in a country is vigorous and not by merely being TRIPS compliant.

Secondly, that notwithstanding TRIPS compliance, intellectual property remains largely a fantasy in most developing countries and will remain so for years. This he attributes to the fact that eighty percent of the countries of the world are not up to the task of supporting intellectual property rights due to weakness in their judicial systems. He however recommends education of judges about the concepts of intellectual property and developing a reference catalogue of the tools judges need to effectively defend intellectual property rights. This would include things like precautionary measures, authority to order seizures to preserve evidence and some description of minimum sanctions with different effects.[FN24]

The third observation is that in spite of the great deal of discourse, alarmingly there is still very little known about the actual effects of intellectual property on the activity patterns of developing Countries. He however recommends that more attention should be paid to empirical studies of effects of intellectual property in developing countries.[FN25]

 

CONCLUSION

Innovations and inventions are very significant to the economic  prosperity of a nation and ass such should be encouraged by putting the relevant laws in place.

Taking a look at the TRIPS agreement and the circumstances by which it came into effect reminds me of the biblical account of Esau and Jacob; where the former gave up his birthright for a meal just because he was hungry. Developing countries are like Esau, most of their citizens are hungry, sick, poor and needy and so they have that at the back of their mind when they are negotiating. Developing countries will sign any agreement or agree to terms just to alleviate the sufferings of their citizens. The developed countries on the other hand are aware of this fact and so they take advantage of the situation to get them to sign these agreements in exchange for technology, medicine etc. Developed countries are not really as interested in the development of developing countries as they are in using them to achieve their main objective of protecting their intellectual property. The problem however is not in signing agreements or being parties to international treaties, the problem is in enforcement of these rules as developing countries find it difficult to meet up with their own obligations under the agreement as doing so most times will not be in their best interest.

Another problem I have observed is that the developing countries are not made part of the law making process so their peculiar circumstances and interest are being considered in the process of making these laws. A country is more willing to enforce a law that it was part of the law making process because there would have been opportunity to negotiate and also make contributions that will be favourable to it. I agree with Sherwood that there is very little study to find out the impact of intellectual property in developing countries, the reason for this is simply that that the developed countries are not particularly interested in the development of the poorer countries but simply need the to help safe guard their intellectual property.

I am of the opinion that a developing nations will naturally not be in interested in developing their  intellectual property laws until they start to have their own inventions and innovations, that way they will have something to protect. To have effective international intellectual property laws, the developed countries have to act as “big brothers” by assisting and encouraging developing countries to invent and innovate so they can also have what to protect with IP laws.

Finally I do believe that the human rights perspective should prevail. There is no disputing the fact that authors and inventors have recognized rights but these rights do not exist on equal footing with human rights like right to food, and medicine.

 

FOOTNOTES

FN1. Thomas A. Lipinski & Johannes J. Britz, Rethinking the ownership of information in the twenty first century, issue 2 (Ethics and Technology 2000)

FN2. See John Locke, Two treaties on government, (3^rd Ed 1968)

FN3. Graham Dutfield & Uma Suthersanen, Global Intellectual property law (Edward Elgar publishing 2008) pp 25

FN4. Id at 27

FN5. Laurence R. Helfer. Regime shifting: the TRIPS agreement and the new dynamics of international intellectual property law.

FN6. Catrin Pekari, Intellectual property and human rights development: where to after the first WISS?

FN7. See Lipinski supra at 49

FN8. Mark F. Schultz & David B. Walker, How intellectual property became controversial: NGOs and the new IP agenda

FN9. Melissa McClellan, “Tools for success”: the TRIPS agreement and the human right essential medicine (Washington and lee journal on civil rights and social justice 2005)

FN10. Peter k. Yu, A tale of two agenda’s Vol 13,Ohio Northern University Law Review, pp 523.

FN11. Mier Perez Pugatch, Intellectual property debates: perspectives from law, economy and political economy 2006.

FN12. Schultz supra at 83

FN13. Id

FN14 Yu supra

FN15. Schultz Supra at 86

FN16. Yu supra

FN17. Id

FN18. Id

FN19. Scultz supra

FN20. Laurence R. Helfer, Human rights and intellectual property review 2003

FN21. Id

FN22. Helfer supre

FN23. Dutfield at 12

FN24. Id

FN25. Robert M. Sherwood, Global aspects of intellectual property in technology transfer, vol 42.

FN26. Id