Appropriate IP System Touted For Local Science-Based Industry In Islamic Nations

By Wagdy Sawahel for Intellectual Property Watch
Growth of intellectual property rights depends on the level of technological development and most Islamic countries are seen as marginalised and scientifically lagging least-developed countries. This has led some experts in the region to call for a system-wide approach to make IP rights supportive to local knowledge-based industry with low innovation capacity and avoid its negative effects including restrictive access to new knowledge as well as the high price of new technologies imposed by a strong IP regime.

The Organization of the Islamic Conference (OIC) is a group of 57 geographically-scattered countries with predominantly Muslim populations that stretch from Indonesia to Morocco and from Uganda to Kazakhstan.

Despite being approximately 22 percent of the world population, having 70 percent of energy resources, and 40 percent natural resources, the contribution of OIC countries of the world total outputs (GDP) is only 5 percent, according to 2005 economic report on OIC countries. Trade within the Muslim world is less than 13 percent of global trade. Nearly 40 percent of the population lives below the poverty level, as 22 of the 50 least developed countries in the world are OIC member states.

The United Nations Development Programme (UNDP) has grouped countries of the world in terms of technology into leaders, potential leaders, dynamic adopters and marginalised countries. Only Malaysia and Turkey are classified among potential leaders while the rest of the OIC countries fall under the category of marginalised countries.

A similar grouping by Rand Corporation has classified countries into scientifically advanced, scientifically proficient, scientifically developing and scientifically lagging countries. Only 8 OIC countries, namely, Turkey, Uzbekistan, Pakistan, Iran, Kuwait, Egypt, Turkmenistan and Indonesia, were classified as scientifically developing countries while the remaining 49 OIC countries were classified as scientifically lagging countries.

In terms of research productivity, impact and excellence, no single university from the Islamic world was mentioned in a list of the top 500 universities of 2007, while many other developing countries such as Mexico, Brazil, India, South Africa and Argentina were included in that ranking.

Mohammad Ali Mahesar, assistant coordinator general of the OIC’s standing committee on science and technology (COMSTECH) told Intellectual Property Watch that “the current state of scientific decline in the Muslim world is an outcome of Muslim policymakers’ total disregard for strong institutional arrangement, bad governance, crumbling education system, and neglect of sophisticated industrial development.”

Intellectual Property Rights and the Islamic World

None of the OIC countries appear in the list of the top 15 countries which have submitted international applications under the Patent Cooperation Treaty (PCT), managed by the World Intellectual Property Organization.

However, the use of protected technologies by OIC countries is on the rise, as they also offer IP protection to those operating in their countries. For example, several OIC member countries, including Indonesia, Turkey, and the United Arab Emirates, are signatories to the PCT which allows an inventor to file one patent application and designate numerous PCT member countries with that one application. According to data from the US Patent and Trademark Office, the number of issued US patents that originated in OIC countries between 1977 and December 2004 is a mere 0.05 percent share of the total number of US patents, with Malaysia, Saudi Arabia, Indonesia, Turkey, Kuwait, and Egypt on the top of the list.

According to a least developed countries 2007 report entitled “Knowledge, Technological Learning and Innovation for Development” published by the United Nations Conference on Trade and Development (UNCTAD), “The effects of IPRs on technology transfers to developing countries depend on a country’s level of development, the specific technological fields involved, the level of individual firms absorptive capacity, the life cycle of technologies, the sector at which IPRs are applied, the type of technology used and general market conditions.”

The UNCTAD report suggested that rules on IP rights should be selectively adapted to give a break to the world’s poorest countries, which otherwise may not be able to achieve the technological development that is necessary for them to grow economically and to reduce poverty.

Speaking to Intellectual Property Watch, Syeda Tanvir Naim, former chair of Pakistan’s Council on Science and Technology and a consultant at COMSTECH, said that “empirical research on the East Asian economies suggests that relatively weak IPR protection encouraged technological learning during the early industrialisation phase.”

According to Naim, OIC countries that are scientifically lagging, suffer from private firms that do not invest in research and development or reverse engineering activities that help build technological learning capability as well as to achieve competitiveness and increase in export income.

As innovation is considered to be the most important driver of growth in the knowledge-based economy through its direct impact on technological progress and higher productivity, Islamic states need to promote science and technology investment within local private companies as private sector R&D is documented only for Malaysia and Turkey, which is the 15th largest economy in the world and the fifth largest economy in Europe, Naim said.

Naim also said Islamic countries need to develop their capabilities in understanding the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and its related regulations. She added that OIC countries need to understand the impact of various regulations and standards imposed by TRIPS and need to make necessary amendments in their IP laws by carefully examining flexibilities offered by TRIPS.

Naim called upon Islamic states to strengthen their own absorptive capacity for long term solutions that would enable them to identify relevant technology available elsewhere, strengthen their bargaining power in transferring technology on more favourable terms, assimilate that technology quickly once transferred, imitate and produce creatively, and eventually generate their own IP rights.

Multinational Companies and a National Innovation System

Naim said, “Multinational companies can help develop national innovation system[s] provided the technology transfer agreements are carefully drafted through bringing state of the art manufacturing technologies and best management practices.”

“It depends on the host country how they manipulate multinationals for building their own S&T capabilities,” Naim added. “China and Malaysia are good examples.” According to Naim, strong IP rights are considered an incentive for multinationals but is mostly applies to pharmaceutical firms.

Managing IPRs in the Islamic World

Mohammad Taeb, an Iranian technology transfer expert and former coordinator of the research and human capacity development programme at the Institute of Advanced Studies at the Japan-based United Nations University, told Intellectual Property Watch: “Institutionalising the knowledge economy requires deep and sustained social changes in which governments should appreciate that they need to make a system-wide approach in science and technology development.”

Taeb said that “in such a system every facet of the society is designed and governed in such a way that it contributes to the creation, transfer, and utilisation of knowledge.”

Taeb pointed out that “It is imperative to apprehend that science and technology development is a long-term policy commitment in which many ministries should be involved in a focussed and a well-coordinated manner and intellectual property protection is the core foundation of such a system.”

According to Taeb, Islamic countries, individually as well as collectively, have the potential to join forces and complement each other in the long process of knowledge creation, transfer, and utilisation.

“OIC as a legal platform could greatly facilitate creation of effective and mission-oriented international institutions among Islamic states as well as initiating discussion on developing an Islamic IPR regime,” Taeb said, adding that such an IPR regime would be tailored in such a way that it makes intellectual property rights “supportive to science and technology development in the Islamic states and avoid its negative effects.”

Hassan Moawad Abdel Al, former president of Alexandria, Egypt’s Mubarak City for Scientific Research and Technology Applications, summarised what OIC should do in the IP arena, telling Intellectual Property Watch that “economic globalisation increasingly rewards intellectual, rather than physical, assets leading to strong IPR regimes being in favour of industrialised countries over users or potential users in OIC countries. Thus, IPR regimes need to be tailored to such countries´ specific needs and conditions, otherwise OIC countries with low innovation capacities may be locked onto a low-technology path.”

Abdel Al pointed out that the IP regime must not deny local firms in OIC countries important sources of technological progress, namely their own adaptation efforts, nor innovation through creative imitation which had helped industrialised countries in the past to become so as a result of weak or non-existent IP protection at that time.

“Why are OIC countries being prevented from following the same industrialisation path that developed countries followed” Abdel Al said.

Abdel Al also said that OIC countries should adopt plans for science and technology reforms with the aim to set up a “technological development society” through encouraging investment in the knowledge economy that will lead to the adoption of intellectual output as a source of income and national wealth.

Wagdy Sawahel may be reached at info@ip-watch.ch.