TWN Info Service on WTO and Trade Issues (Feb17/13)
16 February 2017
Third World Network

Major ICs seek tightening IPR framework at WTO
Published in SUNS #8402 dated 15 February 2017

Geneva, 14 Feb (D. Ravi Kanth) - Major developed countries have called for tightening the intellectual property framework at the World Trade Organization to ensure that their micro, small, and medium-sized enterprises (MSMEs) are protected from sharing technologies, according to a proposal reviewed by SUNS.

Under the pretext of "Inclusive Innovation and MSME Collaboration," the five countries have suggested that transfer of technology in global value chains and for combating other challenges such as climate change, comes with a hefty price and stringent multilateral intellectual property rights (IPR) provisions, according to several developing country trade envoys.

[In the Uruguay Round, resulting in the WTO and its agreements, developing countries agreed to undertake new obligations, such as in TRIPS, as the price for the developed countries to reverse course and undertake long-term reform of their agricultural sector and trade to end distorting subsidies and protection.

[After the initial measures on entry into force of the WTO, these agricultural reforms have however stalled and, in fact, the subsidies and support have multiplied and spiralled out of control.

[Despite this, the US and other major industrialised countries have been attempting to increase the obligations of developing countries, such as through the proposed strengthening of IPR framework, to ensure continued rentier incomes for their enterprises through global monopoly rights. SUNS]

In a restricted two-page proposal entitled "Intellectual Property and Innovation: Inclusive Innovation and MSME Collaboration", which was circulated on 10 February, the five major developed countries - the United States, the European Union, Japan, Switzerland, and Australia - justified a stronger IPR framework for MSMEs on several grounds.

Significantly, the IPR framework must contribute to the innovation efforts of MSMEs in the global trading system, the sponsors argued.

MSMEs "as entrepreneurs, start-ups, businesses, researchers and investors" enter into partnerships and collaborations such as "inter-firm partnerships, research and development opportunities, public-private partnerships, start-up incubators and entrepreneurial ventures," according to the five countries.

Since MSMEs share "information, ideas and research to advance mutual objectives such as developing a product or service," their employees "also undertake secondments or training/teaching opportunities to help facilitate knowledge transfer and development."

Further, such collaborations and partnerships "help to provide shared resources and support" for entities to establish themselves in global value chains.

They also help small entities owned by "women and young people, including those operating from least developed and developing economies," the sponsors argued.

More important, "MSMEs rely on intellectual property frameworks that are able to protect expressions of new ideas, inventions, provide economic benefits and promote follow-on innovation."

Therefore, MSMEs require "transparent and predictable intellectual property rules" for successful collaboration between entities as it involves "transfer, sharing and creation of knowledge, ideas or technology."

IPRs, according to the sponsors, "provide a framework for the ownership, protection and use of ideas and information created throughout a partnership."

Against this backdrop, the five developed countries invited other WTO members to share their national experiences of "inclusive innovation and MSME collaboration - in particular, how intellectual property frameworks and innovation policy or programmes have assisted MSMEs to successfully build and maintain collaborations."

The underlying goal of the proposed information exchange "is to enhance Members' understanding of intellectual property or innovation related initiatives or examples of MSME collaboration already underway that may assist Members considering, implementing or reviewing policies for MSME collaboration."

As part of the information exchange, the sponsors posed three questions to their counterparts at the WTO.

The questions include:

(i) What examples can Members provide that highlight inclusive innovation and MSME collaboration?

(ii) What innovation policies or initiatives have Members implemented, or benefited from, which promote inclusive innovation and MSME collaboration?

(iii) What intellectual property policies or initiatives have Members implemented, or benefited from, which promote inclusive innovation and MSME collaboration?

The proposal by the five countries is expected to come up for discussion during the WTO's Council for Trade- Related Aspects of Intellectual Property Rights (TRIPS) meeting on March 3rd and 4th.

For some time now, the US and its developed country allies have been making concerted efforts to tighten IPR provisions on a spurious plea that innovation needs to be protected.

Knowing full well that innovation is a public good and that it can thrive in an "environment where access to knowledge is real and substantial," the US, the EU, Japan, Switzerland, and Australia are making every attempt to ensure that innovation remains a private good.

According to Achal Prabhala and Sudhir Krishnaswamy ("Patently a Missed Opportunity", The Hindu, 25 May 2016), innovation must remain in the public domain and freely accessible to each and all.

They argued that "while innovation is a desirable economic goal for any society, the academic consensus is that IP is not a good measure of innovation" because "innovation is largely driven by forces other than IP law."

Also, "conflating IP with innovation can be dangerous... IP signifies activity - the activity of producing IP... For this activity to be useful, it must generate value in a society, by being commercially or otherwise licensed and brought to market," according to Prabhala and Krishnaswamy.

Over the past two years, powerful business and trade lobbies in the US have stepped up their efforts to undermine global agreements such as the Paris Climate Change Agreement for addressing issues such as transfer of technology to developing countries.

In a letter to the US Senate Finance Committee Chairman Senator Orrin Hatch on 18 February 2016, the US Chamber of Commerce along with other major lobbies expressed sharp concern "that initiatives at certain United Nations (UN) organizations could degrade the global ecosystem for innovation, leading companies to curb investments in R&D and thus depriving people worldwide of critical advances in areas like healthcare and clean energy."

"Your efforts to safeguard environments that enable innovation, including effective systems for IP protection, will help to enhance development and deployment of critical new technologies globally," the US lobbies argued.

"In particular, we urge you to work with the Administration to support an effective inter-agency approach to safeguard innovation at multilateral institutions."

"Coordination among the US Department of State, Office of the US Trade Representative (USTR) and the US Department of Commerce at the December 2015 UN Framework Convention on Climate Change (UNFCCC) negotiations in Paris," according to the US' lobbies, have ensured that the final UNFCCC text did "not mention IP and thus removes uncertainty that could have discouraged continued investments by US companies in clean technology."

"Significant challenges to IP still remain in the Paris Agreement's implementation and subsequent negotiations - especially those related to the technology development and transfer chapter," the American lobbies maintained.

Against this backdrop, the proposal by the US, the EU, Japan, Switzerland, and Australia at the WTO is a naked attempt to tighten the IPR provisions for MSMEs.

According to the WTO director-general Roberto Azevedo, MSMEs are an important topic for consideration by members for the eleventh ministerial meeting in Buenos Aires later this year.

At a time when the US and the EU are considering imposing a hefty carbon tax and border arrangements without fulfilling their historic climate change obligations, attempts to tighten IPRs under the dubious slogan of inclusive development will further undermine transfer of technology to face climate change and other challenges.