Intellectual Property, Trade and Development

Dr. Burcu KilicGlobal Access to Medicines Program

bkilic@citizen.orgOctober, 2012

www.citizen.org/access

Intellectual Property• Eminently political in the global

knowledge structure• Competing demands from the

developed and developing worlds

• The rights of companies against the rights of society

• Decisions about IP are not so much about simply finding ways to stimulate & reward innovation …

The TRIPS Agreement • Powerful symbol of the

globalisation of IP • Establishes the minimum

standards for IP protection• Provides ample

opportunities for creative interpretations

• Raised great deal of public controversy and debate

• Businesses are no longer satisfied – “Outliving its purpose”

Trans-Pacific Partnership Agreement • Promoted as “high

standard 21st century agreement”

• A living agreement; remains relevant to emerging issues

• What could not be obtained through TRIPS is sought in TPP

• Promoted as addressing the weaknesses of TRIPS

• Aims for “golden rules” for the future of IP

“Biggest threat to free speech and intellectual property that you’ve never heard of”

American Civil Liberties Union

Different visions for the 21st century

• Lack of transparency• A negotiation chip in a wider

geopolitical context• Highly constraining and

protectionist IP provisions• Sets a system up to maximise

the benefits from IP ownership and pulls up the ladder for low and middle-income countries

Different visions for the 21st century

• Re-emergence of ‘citizen innovator’.

• Open innovation

• IP touches human life • No one should die of HIV/AIDS,

tuberculosis, malaria

• The public is now at the IP table• Call for broader participation in

policy making• Information is the root and

infrastructure of freedom in 21st century.

• The freedom to understand, study, tinker with, improve, modify, share, keep and teach others what we know

Deep politics of IP

• Post-TRIPS experiences • Deadweight losses & costs

and side effects• Balance between legitimate

IP rights and continuous supply of competitively-priced medicines

• We can end AIDS: treatment as prevention

• Indonesia: licenses for 7 HIV/AIDS and Hepatitis B medicines

Kicking Away the Ladder • IP propaganda: praise the

strong IP protection• IP fundamentalist view

– “IP piracy is inimical to development”

– “Strong IP rules promote innovation and investment”

• Restrict freedom to tailor national or regional IP regulations

• Good policies of the past became bad policies today

Imitation to Innovation• Historical evidence• Freedom to design

national IP policies conducive to development

• Imitate first, innovate later

• Copying essential part of the learning process

COSI FAN TUTTETransformation from ‘developing’ to ‘developed’ within a

relatively weak patent system, which allowed for local absorption of foreign innovations.

German Dye Industry- Had

the German patent law

arrived earlier, fewer firms

would have entered into the

industry

“The US experience during the

nineteenth century suggests

that appropriate intellectual

property institutions are not

independent of the level of

economic and social

development”. Khan B.Z

South Korea –” Only after countries have

accumulated sufficient indigenous

capabilities with extensive science and

technology infrastructure to undertake creative

imitation in the later stage that IPR protection

becomes an important element in

technology transfer and industrial activities”. KIM

Swiss Pharmaceutical Companies: Excluded chemical processes from patentability until 1954

Economic Research • Eicher et al. (2006)- Impact of IPR on

innovation is variable depending on the level of economic development

• Thomson &Rushing (1999)- cost of strengthening the IPRs regime comes at the expense of developing countries

• Chen & Puttitanun (2008)- U-shaped relationship between IPRs & a country’s level of development - stronger impact on innovation in countries with a higher level of development

• Lerner (2009) –examines UK patent filing around the world. No relationship between strengthened IP policy and innovation

• Schneider (2006) – uses patent data as a proxy for innovation. Increased IPR enforcement leads to more innovation in developed countries but less in developing countries.

• Falvey et al (2004)- Impact of levels of strong IP protection: Middle-income countries- bear the cost of discouraging imitation

TRIPS-Plus FTA provisions• Neither theory nor available

studies provide much guidance on the likely innovation or development outcomes of implementing in trade agreements the strictest IP rules or none at all.

• World Bank (2005)- Stricter TRIPS-plus clauses do not have positive developmental effects.

• “ Countries have to develop an IPR strategy appropriate to their level of development, and then analyze carefully which if any IPR provisions ought to be contained in trade treaties or RTAs.”

The Sun Rises in the East

• Internationalization of science, technology and innovation

• Changing balances & competing ambitions

• Following manufacturing, R&D is now moving East

• Asian markets demanding regional responses to regional needs.

“Within the next 40 years,

some of the most major innovations in the world

will come from elsewhere – outside of the West.

For the moment the West is lucky that they don’t

have sufficient IP protection, they don’t have a

culture of innovation. But within 40 years, you can

imagine that the great scientific cures and the

great IT innovations are going to come from

other regions…” Ken Cukier, the Economist

,

The present situation may be short-lived. Moving from unipolar to multipolar world.

“Now, if the [West has] incredibly strong IP rules, we are going to be binding our hands and feet because we are going to suffer under the same regimes that we are being accused of using to inflict suffering on others. That’s why balance is important: it’s in our own self-interest.”

Ken Cukier, the Economist

Never forget where you came from -- it might save you from where

you could end up!

Will the US government be so pro-patent when the proportion of domestic patents granted to Indian and Chinese inventors increase dramatically?

Thank You!!

Any Questions?

Dr. Burcu KilicPublic Citizen - Washington, D.C.

bkilic@citizen.org+1 202 588 1000

www.citizen.org/access