The Myth Of IP Incentives For All Nations – Q&A With Carlos Correa

[Note: this article has been translated into French, Spanish, Portuguese, Russian and Thai, available here.]

Dr Carlos Maria Correa, an Argentinian economist and lawyer, is globally renowned for his expertise on international trade, intellectual property, health, technology transfer, investment policy and especially their impact on developing countries. He has authored several books and academic articles and been a visiting professor at several universities. Additionally, he has consulted with many United Nations agencies, the World Bank, and other regional and international organisations and has advised several governments on intellectual property, innovation policy and public health. Correa was a member of the UK Commission on Intellectual Property, of the Commission on Intellectual Property, Innovation and Public Health established by the World Health Assembly and of the FAO Panel of Eminent Experts on Ethics in Food and Agriculture.

Currently, he is the Director of the Centre for Interdisciplinary Studies on Industrial Property and Economics Law, at the University of Buenos Aires. He takes over as the Executive Director of the Secretariat of the Geneva-based South Centre from 1 July 2018. Correa recently engaged in an interview with Patralekha Chatterjee for Intellectual Property Watch. [Note: this interview is number two of two. The first, with Dr Othoman Mellouk, is available here.]

Intellectual Property Watch (IPW): Conventional wisdom has it that strong protection of intellectual property rights leads to development through the promotion of innovation. But does IPR have the same impact in all countries, irrespective of their level of development?

Carlos Correa

CARLOS CORREA (CORREA): The impact of IP, like of any other policy, is dependent on the particular context where it applies. The argument that IP will have the same effect regardless of the level of development is just illogical, an inadmissible simplification from a theoretical and practical point of view. For example, it seems evident that the incentive effect that IP may have regarding innovation will not be the same in countries with a diversified and advanced industrial structure and in those dependent on the production and trade of commodities.

IPW: How many of the key arguments premised on linking IPR with trade and innovation hold good and how many are myths?

CORREA: Any simplification about those links may be characterized as a ‘myth’. IP protection does not necessarily lead to more innovation or trade. It may have the opposite effect, for instance, if local companies at an early stage of technological development cannot enter certain markets, they will be prevented to move through the learning curve and upgrade technologically. Historical studies show that today developed countries advanced in their industrialization processes on the basis of lack of IP protection or flexible IP regimes. The US itself provides a good example in this regard.

IPW: How does one challenge the myths around IPR and trade and innovation? What role do you see for civil society, both at the local and global level, in countering the current challenges in this area and protecting public health and public interest?

CORREA: These myths can be solidly challenged on the basis of the wide body of academic literature on the subject, including general, sectoral and country studies. Literature has focused primarily on patent rights, but there are also studies on other aspects of IP. Public interest can be protected if the needs and policies of a particular country are properly assessed and demands (or pressures) to increase the level of IP protection are resisted. The recently adopted IP Policy by South Africa provides a good example of how a policy may be developed taking into account public interests rather than dogmatic views on the matter.

IPW: Many emerging economies like India, which are trying to attract foreign investment, are under tremendous pressure to buy into the argument that without a stringent IPR regime, TRIPS plus so to speak, foreign investment would not come in and this could derail their aspirations of boosting economic growth. Is there evidence that supports this line of thought.

CORREA: There is no evidence in this respect. FDI is primarily attracted by other factors, such as market size and expected growth, political stability, a functioning judicial system. India has had a steady economic growth and is today one of the biggest world economies. It also complies with the internationally accepted IP standards as contained in the TRIPS Agreement. There would be no real need to increase or expand IP protection to attract FDI.

IPW: Emerging economies like India are also keen on becoming innovation hubs. Simultaneously, there are public interest issues like the need to provide affordable medicines to millions of poor people. Given the current challenges, how does one balance innovation with IPR and public interest? What would be your advice to such countries?

CORREA: Each country has to define how to integrate IP into national policies. My advice would be to objectively study the situation and prospects in different sectors of the economy and the social implications of IP, and on that basis adopt suitable policies. Of course, the TRIPS Agreement sets out some limitations, but their effects might be mitigated by using the so-called ‘TRIPS flexibilities’, which are particularly important in the area of public health. It would also be important to acknowledge that a rational policy should aim at promoting both innovation and access to its outcomes, and that IP does not automatically lead to more or better innovation. The diffusion of knowledge and technologies is essential for progress in a society.

IPW: Thank you.