Landmark WIPO Conference On IP And Development Kicks Off

The role of intellectual property in economic, social and cultural development is at the heart of an international conference organised by the World Intellectual Property Organization this week. Today, a diverse range of speakers gave their views on the relationship between IP and innovation and creativity, with some describing in specific examples how IP helped their developing economies. Many speakers insisted on the need for developing countries to have policy space to define an IP system best suited to their development needs.

The International Conference on Intellectual Property and Development is taking place from 7-8 April. The conference, a landmark for WIPO, is bringing together developed and developing country academics, members of governments, and representatives of international organisations.

WIPO Director General Francis Gurry opened the meeting (WIPO video here) by noting that the organisation has its base in a public-private partnership. WIPO is of course an intergovernmental organisation, he said, but 97 percent of WIPO revenue is derived from fees for services rendered to the private sector and 21 percent of the organisation’s expenditure is spent on development and capacity building activities. It is a unique partnership and a precious one, he said.

The conference is timely, in a changing world environment, he said, adding that IP is no longer at the periphery of economic systems, but now sits at the centre. Most governments consider innovation as a major element of their economic strategy and a tool for creating a sustainable economy, he said.

However, finding the right balance between creating incentives to enable market exchange, and insuring social enjoyment of the benefits derived from innovation and creative and cultural work is important, he said.

According to several speakers on the first day, history shows that developed countries copiously copied innovations from other nations and imitated them on their way to industrialisation, and developing countries should be allowed a flexible approach to intellectual property protection to have a chance to catch up on innovation and industrialisation.

Argentinean Ambassador Alberto Pedro D’Alloto, chair of the WIPO Committee on Development and Intellectual Property (CDIP), said IP has a vital importance in the world and is linked to almost all spheres of human life. As the chair of the CDIP, he said he has experienced the tension around IP among many different stakeholders. It is essential that the IP system evolves in a balanced manner, and WIPO has to play a pivotal difficult role in all areas of IP to create new standards and keep up with rapid technologies advances, he said. Conditions are different from country to country, he added.

D’Alloto praised the way WIPO has implemented its 2007 Development Agenda and said Argentina benefitted from Development Agenda activities, but said WIPO needs to do more to support South-South cooperation.

Rob Davies, South African Minister for Trade and Industry, Ministry of Trade and Industry, in his keynote address underlined the difference of views on the relationship between IP regimes and economic development. He said developed countries, such as Switzerland, used weak IP regimes before their industrialisation, before establishing stronger rules after they had achieved a certain level of industrialisation, and added that there is so far no firm evidence IP fosters industrial development. Intellectual Property Watch reported on his remarks (IPW, WIPO, 7 April 2016).

Positive Effects of IP Rights on Innovation Not Proven

Keith Maskus, associate dean for social sciences, Department of Economics, University of Colorado (US), said it is not likely that poorer economies by reforming their IP system could yield positive results on growth and development, but it is more likely to happen if it is done in a holistic approach.

“It’s remarkable how little is known about” the positive effects of IP rights on innovation, he said. Casual evidence since TRIPS [the 1994 WTO Agreement on Trade-Related Aspects of Intellectual Property Rights] shows that it does not appear that developed economies have become more innovative after the harmonisation and globalisation of the IP system, he said.

Econometric studies are mixed, he said, but support two conclusions: First, patent reforms can and do stimulate more innovation, more technical diffusion and exports in middle-income emerging economies with human capital and competitive markets. However, there is little evidence to date of such effects in poor countries. Creativity is difficult to measure in poor economies as it mostly happens outside of the international IP system, he said.

On access to medicines, Maskus said patents can and do support efficient licensing in private-public drug development partnerships and distribution of essential medicines. Several post-2005 studies have shown that the introduction of patent laws had a modest effect on prices of medicines, he said. But it is unclear if that can be attributed to several factors, such as price regulation, threat of compulsory licensing, or more competition than realised, and more research is needed.

According to Maskus, the availability of new drugs is delayed significantly by the absence of patents and/or the presence of strong price controls.

Lessons for policymakers in developing countries to benefit from IP rights at least cost include a necessity to have transparency and certainty in administration and enforcement of the IP rights system. Other lessons are to take advantage of available limitations and exceptions, to have rigorous standards and opposition procedures for patents, and to narrow the definition of trade secrets, he said.

Davies, commenting on Maskus’s presentation, said developed countries started imitating innovation, then proceeded to register patents after they started innovating themselves.

Shamnad Basheer, honorary research chair at Nirma University, India, and founder of SpicyIP blog, noted there are different interpretations of the concept of development and said the conversation around IP is still mostly black versus white. He said IP and social justice could be seen in a “3-D” dimension: Democratisation (versus the usual “IP priesthood”), Distributive Justice (versus productive efficiency), and Diversity (versus uniform IP regimes). The term 3-D is also a play on the controversial Section 3(d) of the Indian Patent Law that creates a higher threshold for patenting to be limited to real innovations.

There is a need to go back and revisit the script around the property metaphor, he said. IP, unlike real property, does not benefit from clear boundaries.

It might be time to consider compensatory commons, in which there the principle of exclusivity is replaced by a take-and-pay philosophy.

Compulsory licences are sometimes suspected of hindering future innovation, but it has not been documented by evidence, he said, and although the pharmaceutical industry is heavily reliant on IP protection to finance research and development, it could be done outside of the patent system, he said. Compulsory licences might also enable originator companies to reach markets that they would not have entered with their regular prices, and still get royalties for this market, he said.

Henning Grosse Ruse-Khan, professor at Cambridge University (UK), presented a case of utility model protection and how it has evolved in time in Germany. Initially, he said, the utility model protection provided small and medium-sized enterprises with an inexpensive, quickly available protection for small innovations.

Nowadays, according to Grosse Ruse-Khan, the main attraction of utility models is speed, which make them attractive for industries with short product lifecycles and for enforcing pending patents.

“Countries have made conscious choices about their IP systems and they appear to have made these choices according to their level of development,” he said. Utility model protection in Germany shows that the purpose and function of an IP system change over time, and thus it underlines the need for policy space to design or redesign national IP systems. He raised concern that free trade agreements are including language that is too comprehensive and specific to allow future variations and evolution of the IP system.

When it comes to developed countries, they introduced protection only when sufficiently developed, developing countries catching up on technology might require the same type of flexibility, he said.

Carlos Correa, director of the Center for Interdisciplinary Studies on Industrial Property and Economics at the University of Buenos Aires, Argentina, basing his presentation on different sources, said there is no evidence that the patent system acts as a promoter of innovation, and in fact could even hinder it.

The optimal protection of IP rights increases with the levels of development, he said, so that once the country’s technological ability is above a certain threshold, the imitation effect is dominated by the innovation effect.

He cited the example of the United States, which, according to a US Congress document, when it “was still a relatively young and developing country … refused to respect international intellectual property rights on the grounds that it was freely entitled to foreign works to further its social and economic development.” He specified that US industry mostly copied innovations from the United Kingdom.

Voice from Russia: Innovation Needs IP Rights

Ivan Bliznets, rector at the Russian State Academy for Intellectual Property in Moscow, strongly advocated IP rights and said the innovative processes in the economy are linked to the functioning of IP institutions.

Russia has a strategy of innovative development laid out until 2020. This strategy includes a significant increase in the intellectual component of the Russian economy, the creation of a culture of respect of intellectual property, and the establishment of effective intellectual property institutional environment, he said. “Accessibility does not mean freedom,” he argued.

He underlined a number of challenges, among which is insufficient funding for research and development and the low level of innovative activities.

Copyright, Authors and Performers, Public Domain

Mihàly Ficsor, chairman, Central and Eastern European Copyright Alliance (CEECA) Budapest, Hungary, said from the point of view of development, it is important to stress that copyright should promote creativity of authors and performers and not only investors and intermediaries.

He mentioned a proposal by the Group of Latin American and Caribbean Countries (GRULAC) to the WIPO Standing Committee on Copyright and Related Rights (SCCR), calling on the committee to look into transparency on the remuneration of authors and performers on digital platforms (IPW, WIPO, 14 December 2015), calling it interesting.

A former vice-president of the International Confederation of Authors and Composers Societies, Ficsor said collective management societies are indispensable organisations in every country, and provide an important forum to organise and promote creativity.

Irini Stamatoudi, general director of the Hellenic Copyright Organization, Greek Ministry of Culture and Sports, was asked to speak about copyright and the public domain.

Stamatoudi is a candidate to be nominated as the new head of copyright at WIPO, according to sources. The post was left open after Anne Leer stepped down from the post of Deputy Director General for Culture and Creative Industries Sector last autumn (IPW, WIPO, 23 November 2016).

Stamatoudi said copyright is a basic tool for promoting and sustaining creativity and investment in the creative industries, but it also is a balancing exercise. The public domain, she said, is generally defined by subject matter which is not protected by copyright, works whose term of protection has expired, and works in which the author has waived his/her rights, such as the zero licence in Creative Commons.

The public domain, she said, acts as a counterbalance to copyright, and added that international, regional, and national laws on copyright provide for flexibilities.

Case Studies

Octavian Apostol, director general of the State Agency on Intellectual Property in Moldova, presented how a branding project “From the Heart – Brands of Moldova,” launched in 2012, to increase the competitiveness of Moldovan brands in the field of apparel, footwear and accessories, resulted in an increase in sales, productivity, the creation of new brands, and an increase in export to foreign markets.

Sara Allen, attorney-at-law and project manager on the Protection of Geographical Indications Project in Jamaica, illustrated Jamaica’s effort at establishing geographical indications through the case of Jamaican jerk seasoning.

She described the challenges of the establishment of the geographical indication for jerk seasoning, including the setting up of an association of producers, and control procedures, and remarked on the help of the government of Switzerland and WIPO in the process.

Davies remarked that the vast majority of food products originated from the “Fertile Crescent” and products have been developed and named over centuries. Some producers in Europe want exclusive use of those names, he said, adding that the European Union made the protection of European GIs a condition in bilateral trade agreement discussions ongoing with South Africa.

William New contributed to this report.

 

Image Credits: WIPO, William New, Catherine Saez, IP-Watch