Global Trends by Martin Khor

Monday 25 April 2005

Debate in WIPO on future of intellectual property system

A movement to reform the global system of intellectual property rights (IPRs) in general and the World Intellectual Property Organisation (WIPO) in particular gathered steam when many developing countries put forward their case forcefully on 11-13 April.

At a special three-day meeting on a Development Agenda for WIPO, 14 countries calling themselves the Group of Friends of Development (FOD) presented a detailed and impressive paper calling for a rethinking of IPRs (such as patents and copyright) and a change in the way WIPO operates.

WIPO is a United Nations agency dealing with IPRs.  It main activity so far has been to promote IPRs all over the world.  Many developing countries and public interest groups now believe it has gone too far in boosting patents and copyright, at the expense of consumers and the public in general.

The FOD Group, led by Brazil and Argentina, argued that recent international treaties at the World Trade Organisation and WIPO had led to developing countries having to adopt levels of IPRs that were too high, with adverse economic and social effects.

They called for rules and future negotiations on IPRs to be oriented to development principles.   Also, WIPO should change its mandate and decision-making system and the technical advice it provides to countries.  Finally,  the organisation shopuld promote technology transfer to developing countries.

The countries say that intellectual property  is not an end in itself, but a means for promoting the public interest, innovation, and access to science. There should be a proper balance between the public interest and those of rights holders.

At the WIPO meeting last week, there was a clash of views, mainly between developing and developed countries.  Most developing countries (including regional groups representing Africa, Asia and Latin America) supported the move for a wide-ranging “Development Agenda” involving reform of WIPO and a review of its treaties and future work.

The group of industrialised countries, however, took a different position.  Their approach was that strengthening  intellectual property rights (IPRs) would contribute to development, that WIPO was doing a good job in that, and that the focus of a development agenda would be to improve WIPO’s technical assistance activities. 

During the debate, many developing countries stressed that the development agenda being proposed could not be equated with more technical assistance.

Instead of reforming WIPO, the United States proposed that an internet website be created to matchmake donors and recipients of technical assistance on IPR issues.  A paper by the  United Kingdom  also only proposed improving the technical assistance work of WIPO.

This did not go down well with the developing countries advocating deeper reform. South Africa stressed that it will not support any suggestion that propounds technical assistance as the development agenda.  It called on all Member States to look carefully at all the elements of the FOD proposal which is not limited to technical assistance.

The Africa Group supported a development Agenda that would inject the development dimension in WIPO’s programmes.  The Asia group also welcomed the FOD proposal of FOD.  It agreed that protection of IP is not an end in itself, saying “the Development Agenda should take into account any negative impact on the users of IP, on consumers at large and on public policy in general, not just the interest of IP owners. It is vital to inject this balance and equity into the various WIPO bodies.”

Typical of the view of developed countries, the Swiss delegation expressed surprise over the WIPO Development Agenda since in its view, this already exist and does not need to be established.

In an analytical statement, India said that the real development imperative is to ensure that the interest of IP owners is not secured at the expense o the users of IP, of consumers at large and of public policy in general. 

According to India, the primary rational for IP protection is to promote societal development by encouraging technological innovation.  The legal monopoly granted to IP owners is an exceptional departure from the general principle of competitive markets.

That exception is given not to allow monopoly profits in itself but to give incentives for innovation that might produce sufficient benefits for society to compensate for the loss to consumers.

Monopoly rights then is a special incentive that needs to be carefully calibrated by each country taking into account the the costs and benefits of such protection.  

Should the rationale for a monopoly be absent, as in the case of cross-border rights involving developed and developing countries, the only justification for granting a monopoly is a contractual obligation, such as the WTO’s agreement on IPRs (known as TRIPS), and nothing more, said India. 

In such a situation, it makes little sense for one party, especially the weaker party, to agree to assume greater obligations than he is contractually bound to accept.  

This is what developed countries have sought to do so far in the context of WIPO, said India, adding:  “The message of the Development Agenda is clear: no longer are developing countries prepared to accept this approach, or continuation of the status quo.”

Neither IP protection nor harmonization of IP laws leading to higher protectiojn standards in all countries can be an end itself.  For developing countries to benefit from providing IP protection to developed countries’ IP holders, there should be obligations by  developed countries to transfer technology to developing countries. Absent an obligation to transfer technology, asymmetric IP rent flows would be a permanent feature and benefits of IP protection would forever elude consumers in developing countries.

India said the FOD proposal had pointed out that technology transfer should be a basic objective of the global IP system and WIPO has the responsibility of taking measures for this as part of the development agenda.

India concluded that developed countries and WIPO should acknowledge that IP protection is a policy instrument that needs to be used carefully in developing countries. While the claimed benefits of strong IP are a matter of debate, it entails substantial real and immediate costs for developing countries.  Each country needs flexibility so the cost of IP protection does not outweigh the benefits.  WIPO should recognize this and formulate its work programme accordingly and not limit its activities to the blind promotion of increasingly higher levels of IP protection.

Many public interest NGOs told the meeting that consumers are already experiencing major problems, such as the high cost of medicine due to patents, the high cost of software, and the increasing restrictions to the use of library materials which curbed access to information.

They also pointed to the problem of “biopiracy”, in which genetic resources of developing countries were wrongly patented by big firms in the rich countries.

They called on the governments to reform the IP system so that the interests of consumers and small enterprises in develolping countries could be given priority.

At the end of the meeting, it was decided that two more special meetings would be held in June and July to see whether agreement can be reached on whether and how to bring the Development Agenda forward.

A report is scheduled to be finalized on this in July, to be given to the WIPO General Assembly to consider later this year.