Developing Nations Discuss Experiences With IP Rights And Economic Development

By John T. Aquino for Intellectual Property Watch
WASHINGTON, DC – A panel of government representatives from key developing nations this week used the opportunity to highlight efforts at good stewardship of intellectual property rights and acknowledge a link between IP protection and economic development. But they also raised concerns about the application of the existing global IP system to their countries.

The 4 April panel in Washington, DC was sponsored by the Center for Strategic and International Studies (CSIS), a prominent Washington policy think tank expanding into IP issues in a way that appears to promote IP rights. CSIS’s James Lewis said intellectual property rights and economic development are often seen as opposing values. Yet after hearing the presentations of representatives from India, Brazil, and China, Lewis said he saw commonalities of approach.

Research has shown, said panel moderator Robert Shapiro, chairman of the economic consulting firm Sonecon and former US undersecretary of Commerce for economic affairs, that there is a “clear virtuous circle: countries that have strong IP protection encourage the importation of technologies to their countries and subsequently increase the rate of their own technological development,” said Shapiro “This is not abstract. Look at South Korea, China, and Taiwan.”

A common element was the seeming agreement of the three panellists with Shapiro’s view, as each panellist described the IP situation in their countries and the assertion that an effective system for IP protection appeared to be good for the country’s own economic development.

Yang Guohua, counsellor for intellectual property at the Chinese Embassy, commented that he had been told that the sizable audience would have been maybe 12 people five years ago. The interest in intellectual property is not limited to Washington, Guohua said. “If we held [the panel] in China we would have 400 attending. But then we have more people than you.” Guohua struck another common theme among the panellists in describing the relative newness of IP protection in his country, saying the first patent law in China was passed 25 years ago, and the first copyright law 15 years ago.

“I see tremendous progress in IP enforcement [in China],” Guohua announced, “but still see many serious problems, which is why the government and the private sector have put more focus on IP protection.” In support of his claims, Guohua read from several documents. One was a state council paper from last year on the “promotion of innovation and self-promotion over the next 20 years.” A necessary co-objective for the same period, Guohua read, “is to build a complete legal system to combat counterfeiting and piracy so that the government can create an environment for the creation and transfer of intellectual property rights.”

The second document Guohua read from was the 2007 action plan for IP rights released the day before the event by the state council; among the 10 action items were legislation, enforcement, judicial protection, public awareness of IP rights, obtaining international cooperation, promoting IP protection to businesses, and providing service assistance to rights holders. A third document was a China Supreme Court opinion on how to increase the strength of IP rights. The paper called for more training for IP judges, the creation of IP tribunals, and for ways to publicise the judges’ rulings, such as the Internet. Guohua also read from a press release on a conference held in China last week that addressed the same topics. “This is what we are talking about in China,” Guohua said.

Good Fences Make Good Neighbours?

India’s patent law was passed just two years ago, said Anoop Mishra, economic minister for the Embassy of India. “In India today, IP is fully-TRIPS compliant,” referring to the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The number of patent applications has grown 50 percent in the past five years, he noted. “We have also introduced an interesting new concept of pre-grant opposition to patents, which the filing companies don’t like, of course.”

Mishra described a number of emerging concerns, including public health issues in relation to patents. “There is a great debate involving the cost of medicines as we try to balance the rights of the innovators and of society,” he said. Mishra also noted the policy that “any patent regime should not obstruct or restrict free, economic competition. This will need to be addressed.”

In the interest of uniformity and harmonisation, Mishra suggested that, since the United States is all but alone in its “first to invent” patent approach, it should consider that “first to file is better.”

But Mishra said that IP protection has opened up “a great opportunity in the pharmaceutical sector in India, enabling an environment for global players to enter India.” While other countries have transferred technology through international agreements, Mishra noted that mergers and acquisitions have had a more positive effect in India.

Overall, Mishra said, “India recognises, as with real property, that ‘good fences make good neighbors,'” quoting an American proverb that the US poet Robert Frost refers to in his poem “Mending Wall.”

While stating that Brazil has fought strongly against IP piracy, Carlos Alfredo Lazary Teixeria, minister-counsellor for economic affairs at the Embassy of Brazil, said that “Brazil has been confronted with an anti-piracy focus that has often obscured the larger picture.” The country’s Instituto Nacional da Propriedade Industrial (National Industrial Property Institute) has expanded the number of employees in an effort to address the backlog in patent applications. The goal is to have doubled the number of patent decisions in two years. “We are strengthening out culture for IP.”

Teixeria also re-stated his country’s position that the IP system must include mechanisms for combating “biopiracy,” the misappropriation of genetic resources, traditional knowledge, and folklore (IPW, Developing Country Policy, 31 May 2006). A proposal from Brazil and others to amend TRIPS to address this concern was submitted to the WTO in June 2006.

Shapiro noted that 20 years ago only 25 percent of the book value of the 150 largest US companies lay in what banks used to call “intangible assets.” Today, it’s 66 percent. But because patents, for example, are ideas and intangible, once they are formulated they “can be duplicated at almost no cost,” he said, concluding, “Returns from innovation require strict patent protection.”

John T. Aquino may be reached at info@ip-watch.ch.