Development Agenda Conference: WIPO Can Enable Fair Technology Transfer

Development is to be a lead priority in the World Intellectual Property Organization, with the 2007 Development Agenda under implementation. But what a development-friendly intellectual property programme will look like in practice is not yet entirely clear. On 13-14 October at WIPO, stakeholders are gathered to discuss examples of development and IP and projects implementing the agenda.

Today’s session focussed on technology transfer and the use of intellectual property to aid small-scale producers in developing countries.

A variety of speakers said WIPO could play a role in technology transfer. Some saw that role as ensuring developing countries are able to develop and capture the value in their own technologies, and ensuring that technology transfer arrangements are not only focused on protection of foreign IP rights.

With technology transfer, the focus should be less on who has patents, one of the speakers said. “Only a small percentage of patents are worth the paper they’re printed on in the market place,” said Dennis Patrick O’Reilly, a partner at Washington, DC-based law firm Finnegan, Henderson, Farabow, Garret and Dunner, who said he was taking the “developed-country view.” Instead, he said, “It’s the technology that has the value.”

O’Reilly said technology is “readily available” for transfer from developed countries, they just have to pay for it. “Most of the time companies are not altruistic,” he said, noting the competition and disclosure that is generated by sharing technology. But sometimes they will see the public relations value in giving away technology know-how.

He said WIPO might be able to play the role of “matchmaker” by providing information about who has what technology. Patents also provide information but most have no value.

The point that technology has the value, rather than the patent, “goes to the core of the IP regime,” said Mohammed Gad of the mission of Egypt during a discussion session after the speech. Patents are seen as a “classic, essential form of the deal through which a monopoly right is granted, and in return the flow of technology transfer takes place.”

This indicates that any thematic project WIPO engages in should focus on the “second part of the deal” – that is, developing countries can provide the effective protection, but in return the technology has to come though. Impact assessments should be made in order to judge the role of patenting on technology transfer, he added.

Private entities can be incentivised to transfer technology, but to do so with valuable technology that is seen as part of a businesses’ comparative advantage they must have two key risks addressed, said O’Reilly.

These risks are that the information’s value will be destroyed by its disclosure to others, and that in transferring technology a competitor is created. But benefits in the form of economic gain, or new collaborators, could outweigh risks, O’Reilly added.

Capitalising On Developing Country Assets

For developing countries “how to manage intellectual assets,” – that is, the assets that produce intellectual property – is critical, said Shubhashis Gangopadhyay, managing trustee of research group India Development Foundation. “We need to take a front seat,” he said.

He cited an example of a study being done by a well-regarded medical school in India on a health problem affecting 0.2 percent of the country’s population. “Our greatest minds,” he said “are working on a problem that is worth solving but which is of little value to India.” A programme is needed by which “our researchers can do research which is valuable to India, [which means a] need to devise mechanisms by which they can get paid.”

Gangopadhyay said too many technology transfer deals involve IP protection, as if “the technology is out there and the ownership already decided.” For an example of local innovation, he cited the “Pepsi model” in which Indian farmers were found to have been hooking flexible drinking straws together and poking holes for drip irrigation of odd-shaped fields typical of the region that could not be served by existing rigid straight tubes. This is an innovation now improved upon and wide-spread in India, he said.

Use of trademarks and branding could also aid developing nations, said several speakers. Fair-trade trademarks on, for instance, Darjeeling Tea and Peace Coffee helps to protect the brands of developing nations and ensure that their producers benefit from the sale of products, said Park Eun Kyul, deputy director of the Multilateral Cooperation Division at the Korean Intellectual Property Office.

A lot of small producers do not have brands that could help them win more customers, added Park Seong-joon of the Korean mission in Geneva. For example, if a small town produces apples that are very popular with consumers but has no brand, then there is no way to communicate to those consumers what they are buying.

Fair trade which indicates not only environmental and labour standards but also high quality can help boost a brand, said Paola Ghillani, the former president and chairwoman of the Board of Fair Trade Labelling Organizations, a standards body which ensures that fairtrade labels are produced according to certain standards. She used the example of Max Havelaar organic and fair trade bananas, which were able to break into a stagnant Swiss banana market and in four years take over half of the market share, in exchange for a constant improvement in both quality and environmental performance.

Opening Innovation

Philips, a technology company focussed in medical, lighting and lifestyle products, has changed its business model to one that involves technology sharing with other companies all over the world. This, said Alexander Damvelt, director of technology licensing in the Netherlands office of Philips, is “not a choice [but] a necessity” to keep up with the market.

The company’s old business model involved doing research & development, manufacture, and sales and marketing all in-house, Damvelt said. About a decade ago, they began to outsource manufacture, in the process transferring technology and know-how to third party producers. But a few years ago they started also to open the firm up to R&D from outside (though they also kept their in-house innovation team), he said.

This “open innovation” strategy developed because “you can’t hire all the smart people.” He compared the open innovation model to a sandbox.

The benefits of this “sandpit” strategy, he said, are: you don’t have to pay for all the toys, you can use the toys others do not want, you can negotiate to play with other toys, and you can play alone or with others. But you have to share, you cannot always have it your way, and you must behave yourself.

An IP system can work with open innovation. “Patents are not incompatible with open science,” said Bernard Denis, deputy head of Knowledge and Technology Transfer Group at the European Organization for Nuclear Research (CERN). At CERN, patents are sought on technologies and tools for research that can have commercial value beyond research.