Intellectual Property Rights Intellectual Property Rights Implications for DevelopmentImplications for Development

Fleur ClaessensFleur Claessens

What is Intellectual Property?What is Intellectual Property?

• …… books, CDbooks, CD’’s, video games, paintings, s, video games, paintings, staplers, bags, fabrics, planes, staplers, bags, fabrics, planes, food/drinks, pharmaceuticals, plant food/drinks, pharmaceuticals, plant varieties, computer chips, cars, music, varieties, computer chips, cars, music, broadcasts, sound recordings, etcbroadcasts, sound recordings, etc……

• ……an IP right provide the right holder an IP right provide the right holder with an exclusive right to stop otherswith an exclusive right to stop others

• ..IP right holder may provide licenses..IP right holder may provide licenses• ……IP rights are territorial in natureIP rights are territorial in nature

Forms of Intellectual property RightsForms of Intellectual property Rights

• PatentsPatents• Trade MarksTrade Marks• DesignsDesigns• CopyrightsCopyrights• Geographical IndicationsGeographical Indications• Industrial DesignsIndustrial Designs• Trade SecretsTrade Secrets• Utility ModelsUtility Models• Traditional Knowledge (?)Traditional Knowledge (?)

Patent requirementsPatent requirements

• New/novelNew/novel• Inventive step/non-obviousness Inventive step/non-obviousness

(not obvious to someone skilled in (not obvious to someone skilled in the art)the art)• Industrial Applicability Industrial Applicability • Patentable subject matterPatentable subject matter

What is patentable?What is patentable?

• ““Everything under the sun that is made Everything under the sun that is made by man.by man.““ Diamond v. Chakrabarty 1980 Diamond v. Chakrabarty 1980 US Supreme Court US Supreme Court

• Ideas/inventions are patentableIdeas/inventions are patentable

Exclusions from patentabilityExclusions from patentability

• Discoveries are not patentableDiscoveries are not patentable: : Einstein could not patent his celebrated law that E = mc^2; Einstein could not patent his celebrated law that E = mc^2; nor could Newton have patented the law of gravity. Such nor could Newton have patented the law of gravity. Such discoveries are discoveries are ““manifestations of . . . nature, free to all men manifestations of . . . nature, free to all men and reserved exclusively to noneand reserved exclusively to none””

• Literary, dramatic, musical or artistic worksLiterary, dramatic, musical or artistic works• Schemes, rules, games, computer programs as suchSchemes, rules, games, computer programs as such• Methods of medical treatmentMethods of medical treatment• Contrary to public policy and moralityContrary to public policy and morality: Those which by : Those which by

publication or exploitation might result in offensive, publication or exploitation might result in offensive, immoral or anti-social behavior. Current debate life immoral or anti-social behavior. Current debate life patents/GM Foodpatents/GM Food

• Plant and animal varietiesPlant and animal varieties (in EU not in US) (in EU not in US)

How to obtain a patent?How to obtain a patent?• Domestic patent/IP office: Domestic patent/IP office: filing, obtain priority filing, obtain priority

datedate• European patents: European patents: a bundle of patent rightsa bundle of patent rights at the at the

European patent office European patent office • International level: WIPO PCTInternational level: WIPO PCT

Application requirements:Application requirements:• Description Description as how the invention worksas how the invention works• Claim Claim covering the scope of the legal monopoly covering the scope of the legal monopoly

claimed by the patenteeclaimed by the patentee• Examination and publicationExamination and publication

CopyrightCopyright

• Copyrights protects the rights of authors of literary and Copyrights protects the rights of authors of literary and artistic worksartistic works

• Copyright is in essential a negative right which prevents Copyright is in essential a negative right which prevents others from making copies of the work of an authorothers from making copies of the work of an author

• No copyright in a pure idea/news/simple No copyright in a pure idea/news/simple works/information itselfworks/information itself

• Expression/idea dichotomyExpression/idea dichotomy• If sufficient If sufficient ‘‘selection, judgment and experienceselection, judgment and experience’’ or or

‘‘labour/skill and capitallabour/skill and capital’’ copyright can be granted, even in copyright can be granted, even in a database (so not the content in the data base but the a database (so not the content in the data base but the compilation itself), in EU separate database right, not in compilation itself), in EU separate database right, not in the US. the US.

• Moral rights versus economic rightsMoral rights versus economic rights

Rationale behind IPRsRationale behind IPRs

PatentsPatentsTo stimulate To stimulate innovation/encourage investmentinnovation/encourage investment the the inventor receives an exclusive right to his inventioninventor receives an exclusive right to his inventionin exchange for in exchange for disclosure of the inventiondisclosure of the invention in such in such a way that it allows replication, the inventor a way that it allows replication, the inventor receives a receives a limited amount of timelimited amount of time to recoup his to recoup his investmentinvestment

TrademarksTrademarksProtection of Protection of goodwill and reputationgoodwill and reputation

CopyrightCopyrightProtection of Protection of creativitycreativity

Innovation: Methods and FactorsInnovation: Methods and Factors

““Innovation is the development and implementation of an improved Innovation is the development and implementation of an improved (incremental) or new (landmark) product or process with success in a (incremental) or new (landmark) product or process with success in a

business activity / society”business activity / society”• Methods:Methods:

Formal innovation Formal innovation Scientific method (evidence of efficacy and/or efficiency)Scientific method (evidence of efficacy and/or efficiency) Marketing strategies (new utility, design, process)Marketing strategies (new utility, design, process)

Informal or Traditional Informal or Traditional Experience/beliefExperience/belief intergenerationalintergenerational individual or collectiveindividual or collective FunctionalFunctional

• Factors: Factors: Culture, education, inventiveness/creativity, capital, enabling Culture, education, inventiveness/creativity, capital, enabling

environment, linkages, supplychain management, marketability, environment, linkages, supplychain management, marketability, etc. etc.

Why are IPRs important?Why are IPRs important?

• IPRs allow control over technology, signs IPRs allow control over technology, signs and creationsand creations

• Original Purpose: to Original Purpose: to stimulate innovation stimulate innovation and creativityand creativity by compensating the by compensating the creator/innovator for their intellectual creator/innovator for their intellectual effortsefforts

• Lately: Lately: incentive to investment / incentive to investment / change in change in market players market players

--big multinationals--big multinationals

The TRIPS AgreementThe TRIPS Agreement

……sets minimum standardssets minimum standards

……is part of a package deal is part of a package deal –– WTO Agreement WTO Agreement

……is signed by 153 partiesis signed by 153 parties…… is subjected to is subjected to dispute settlement bodydispute settlement body

...contains enforcement mechanisms...contains enforcement mechanisms

...is subjected to National Treatment and ...is subjected to National Treatment and Most-favoured-Nation Treatment (MFN) Most-favoured-Nation Treatment (MFN) PrinciplesPrinciples

Contemporary Challenges in IPR negotiations...Contemporary Challenges in IPR negotiations...• GIsGIs

1.1. Creation of a multilateral register for wines and spiritsCreation of a multilateral register for wines and spirits

2.2. Extending the higher level of protection beyond wines and spiritsExtending the higher level of protection beyond wines and spirits

3.3. Linkage between GIs and the agriculture negotiations – clawback for terms in Linkage between GIs and the agriculture negotiations – clawback for terms in common usagecommon usage

• Disclosure of Origin Measure Disclosure of Origin Measure

1.1. Legal consequences: Voluntary or not, administrative or patent ability Legal consequences: Voluntary or not, administrative or patent ability requirement (revoke or criminal sanction)requirement (revoke or criminal sanction)

2.2. Linked to CBD concepts ABS and PICLinked to CBD concepts ABS and PIC

3.3. Linked to WIPO or WTOLinked to WIPO or WTO

• Implementation of the WIPO Development AgendaImplementation of the WIPO Development Agenda• Enforcement (WTO US versus China Panel Report)Enforcement (WTO US versus China Panel Report)• Ongoing norm setting activities / FTAsOngoing norm setting activities / FTAs• Technology Transfer Technology Transfer • Technical Assistance and CooperationTechnical Assistance and Cooperation

Why are IPRs controversial?Why are IPRs controversial?

IPRsIPRs• …… create semi-monopolies also covering goods that create semi-monopolies also covering goods that

might be essential to society (e.g. pharmaceuticals might be essential to society (e.g. pharmaceuticals and environmentally sound technologies) /raises and environmentally sound technologies) /raises prices (higher than production costs)prices (higher than production costs)

• ……limit access to textbooks, educational material, limit access to textbooks, educational material, informationinformation

• ……impacts on reverse engineering and imitationimpacts on reverse engineering and imitation• ……exceptions are pushed to the limit/scope is widened:exceptions are pushed to the limit/scope is widened:

– extension of subject matter - - patentability of life / software; extension of subject matter - - patentability of life / software; – extension of term of protection -- 70 years of copyright protection; extension of term of protection -- 70 years of copyright protection; – creation of new rights -- non original databases; creation of new rights -- non original databases; – over relaxation of granting of patents -- lack of adequate description; over relaxation of granting of patents -- lack of adequate description; – inclusion of IP in trade, investment and stand alone agreements; inclusion of IP in trade, investment and stand alone agreements; – primacy of private rights of public rightsprimacy of private rights of public rights

Some factsSome facts

• Swift pace of technological transformation technology Swift pace of technological transformation technology has become important in all economic activitieshas become important in all economic activities

• International collaborations have led to the International collaborations have led to the globalization of all economic and technological globalization of all economic and technological activitiesactivities

• Much more regulation!Much more regulation!

3 countries concentrate around 60% of applications3 countries concentrate around 60% of applications

5 countries account for above 80% of royalties and fees 5 countries account for above 80% of royalties and fees recipients of which above 70% relates to intra-firm recipients of which above 70% relates to intra-firm paymentspayments

The Public InterestThe Public Interest• Promotion of Promotion of

innovationinnovation• Public health and Public health and

access to medicinesaccess to medicines• Nutrition and Food Nutrition and Food

security security • Technology transferTechnology transfer• Competition policyCompetition policy

• Human rightsHuman rights• Development Development • Fight against povertyFight against poverty• Environmental Environmental

protectionprotection• EducationEducation

““Whenever there is a Whenever there is a conflict between human conflict between human rights and property rights, rights and property rights, the former must prevail”the former must prevail”

Abraham LincolnAbraham Lincoln

Socio-economic developmentSocio-economic development

• Stages of developmentStages of development• Sophistication of their industrial base, Sophistication of their industrial base,

including cultural creative industriesincluding cultural creative industries• Coherence with related policies (national Coherence with related policies (national

innovation systems; industrial, trade, innovation systems; industrial, trade, competition, FDI policies)competition, FDI policies)• Sectoral policies: health, education, Sectoral policies: health, education,

infrastructureinfrastructure

IPRs and Development an integrated modelIPRs and Development an integrated model

LEVELS OF DEVELOPMENT

LOW LEVEL

INTERMEDIATE LEVEL

HIGH LEVEL

INTELLECTUAL PROPERTY

RELEVANCE

LOW LEVEL

HIGH LEVEL IMITATION APPLICATION INNOVATION

LEARNING CURVE

Development IPR SolutionsDevelopment IPR Solutions

• WTO Doha (Development) RoundWTO Doha (Development) Round

Doha Round Declaration 14 November 2001Doha Round Declaration 14 November 2001

Doha Declaration on TRIPS and Public HealthDoha Declaration on TRIPS and Public Health

• WIPO Development Agenda (adopted September 2007)WIPO Development Agenda (adopted September 2007)

2004 Initiative by group of developing countries lead by Brazil 2004 Initiative by group of developing countries lead by Brazil and Argentina / development component in WIPO as UN and Argentina / development component in WIPO as UN agencyagency– Use of flexibilitiesUse of flexibilities– Transparency in technical assistance activitiesTransparency in technical assistance activities– Development aspect in all norm-setting activitiesDevelopment aspect in all norm-setting activities

Doha Ministerial DeclarationDoha Ministerial Declaration14/11/200114/11/2001

• ““implementation and interpretation of the TRIPS in a implementation and interpretation of the TRIPS in a manner manner supportive of public health, by promoting both supportive of public health, by promoting both access to existing medicines and research and development access to existing medicines and research and development into new medicinesinto new medicines”” (par 17) (par 17)

• ““the TRIPS Council shall be guided by the objectives and the TRIPS Council shall be guided by the objectives and principles set out in Articlesprinciples set out in Articles  7 and7 and  8 of the TRIPS 8 of the TRIPS Agreement and Agreement and shall take fully into account the shall take fully into account the development dimensiondevelopment dimension”” (par. 19) (par. 19)

• Separate Declaration on the TRIPS Agreement and Public Separate Declaration on the TRIPS Agreement and Public HealthHealth

Technical AssistanceTechnical Assistance

• The Doha Declaration reconfirmed that The Doha Declaration reconfirmed that technical cooperation and capacity building technical cooperation and capacity building are core elements of the development are core elements of the development dimension of the multilateral trading dimension of the multilateral trading system. system.

• 29/11/2005 TRIPS Council Declaration:29/11/2005 TRIPS Council Declaration:

……requests LDCs to supply technical and requests LDCs to supply technical and financial cooperation needs in order to financial cooperation needs in order to implement TRIPSimplement TRIPS

Sierra Leone and Uganda - communications to the WTO Sierra Leone and Uganda - communications to the WTO TRIPS Council, titled ‘Priority Needs for Technical and TRIPS Council, titled ‘Priority Needs for Technical and Financial Cooperation’Financial Cooperation’

Overview of needs in terms of …Overview of needs in terms of … Administrative reformAdministrative reform Short and long term goalsShort and long term goals IP policy and regulatory frameworkIP policy and regulatory framework Administrative reformAdministrative reform Development of IP curriculum and general public trainingDevelopment of IP curriculum and general public training Positive IPR agendaPositive IPR agenda

Promotion of traditional knowledge (museums, national gallery etc, Promotion of traditional knowledge (museums, national gallery etc, formalization of music industry etc…)formalization of music industry etc…)

Train police and judiciaryTrain police and judiciary Improve cooperation between players (government departments, Improve cooperation between players (government departments,

private sector, farmer organisations, music industry, police, customs…)private sector, farmer organisations, music industry, police, customs…) Value edition in food and drinks>GI protection (market branding and Value edition in food and drinks>GI protection (market branding and

marketing efforts)marketing efforts) Provide management services to SMEsProvide management services to SMEs Use public domain knowledge, avoid reinventing the wheelUse public domain knowledge, avoid reinventing the wheel Find niche / comparative advantage, “specialization is the need for Find niche / comparative advantage, “specialization is the need for

civilization”civilization”

Declaration on the TRIPS Agreement and Declaration on the TRIPS Agreement and Public Health 14/11/2001Public Health 14/11/2001

• ““we recognize the gravity of the public health problems we recognize the gravity of the public health problems afflicting many developing and least-developed countries, afflicting many developing and least-developed countries, especially those resulting from especially those resulting from HIV/AIDS, tuberculosis, HIV/AIDS, tuberculosis, malaria and other epidemicsmalaria and other epidemics”” (par 1) (par 1)

• ““ we recognize that IP protection we recognize that IP protection is important for the is important for the development of new medicines. We also recognize its development of new medicines. We also recognize its effects on priceseffects on prices”” (par 3) (par 3)

• ““we agree that the TRIPS does not and should not prevent we agree that the TRIPS does not and should not prevent members from members from taking measures to protect public health, taking measures to protect public health, TRIPS should be interpreted and implemented in a manner TRIPS should be interpreted and implemented in a manner supportive of public health and promote access to supportive of public health and promote access to medicinesmedicines”” (par 4) (par 4)

• ““Each member has Each member has the right to grant compulsory licences the right to grant compulsory licences and the freedom to determine the grounds upon which and the freedom to determine the grounds upon which such licences are grantedsuch licences are granted”” (par 5b) (par 5b)

• ““each member has the each member has the right to determine what constitutes a right to determine what constitutes a national emergencynational emergency or other circumstance of extreme or other circumstance of extreme urgency (par 5c) urgency (par 5c)

• ““leave each member leave each member free to establish its own regime for free to establish its own regime for exhaustion without challengeexhaustion without challenge, subject to the MFN and , subject to the MFN and

national treatmentnational treatment”” (par 5d)(par 5d)

Compulsory license:Compulsory license:

Right to use the patent without Right to use the patent without permission of the patent holder subject to permission of the patent holder subject to

certain conditions certain conditions

(Art. 31 TRIPS)(Art. 31 TRIPS)

Compulsory Licensing Compulsory Licensing ArticleArticle 31 TRIPS 31 TRIPS

(a)(a) authorization of such use shall be considered authorization of such use shall be considered on its on its individual meritsindividual merits;;

(b)(b) such use may only be permitted if, prior to such use may only be permitted if, prior to such use, the proposed user such use, the proposed user has made efforts has made efforts to obtain authorization from the right holderto obtain authorization from the right holder on reasonable commercial terms and on reasonable commercial terms and

conditions and that such efforts have not been conditions and that such efforts have not been successful within a reasonable period of time. successful within a reasonable period of time. This requirement may be This requirement may be waived by a Member waived by a Member in the case of a national emergency or other in the case of a national emergency or other circumstances of extreme urgencycircumstances of extreme urgency or in cases or in cases of public non-commercial use. of public non-commercial use.

Article 31 TRIPSArticle 31 TRIPS

(c)(c) the scope and duration of such use the scope and duration of such use shall be limited to the purpose for shall be limited to the purpose for which it was authorizedwhich it was authorized

(d)(d) such use shall be non-exclusive;such use shall be non-exclusive;(e)(e) such use shall be non-assignablesuch use shall be non-assignable(f)(f) any such use shall be authorized any such use shall be authorized

predominantly for the supply of the predominantly for the supply of the domestic market of the Member domestic market of the Member authorizing such useauthorizing such use;;

Paragraph 6 TRIPS Declaration of TRIPS and Paragraph 6 TRIPS Declaration of TRIPS and Public Health addressed the difficulties WTO Public Health addressed the difficulties WTO Members with limited pharmaceutical production Members with limited pharmaceutical production capacity have in making effective use of the capacity have in making effective use of the compulsory licensing: compulsory licensing:

““We recognize that WTO Members with insufficient or We recognize that WTO Members with insufficient or no manufacturing capacities in the pharmaceutical no manufacturing capacities in the pharmaceutical sector could face difficulties in making effective use of sector could face difficulties in making effective use of compulsory licensing under the TRIPS Agreement. We compulsory licensing under the TRIPS Agreement. We instruct the Council for TRIPS to find an expeditious instruct the Council for TRIPS to find an expeditious solution to this problem and to report to the General solution to this problem and to report to the General Council before the end of 2002”Council before the end of 2002”

Contentious points: Contentious points: --countries eligible to export the --countries eligible to export the

generic medicine generic medicine

--the limited scope of the diseases --the limited scope of the diseases being allowed for CLbeing allowed for CL

--anti-diversion measures to --anti-diversion measures to prevent parallel import of medicines to prevent parallel import of medicines to other countries rather than the intended other countries rather than the intended beneficiarybeneficiary

• Waiver Decision: 30/8/2003Waiver Decision: 30/8/2003• Article 31bis TRIPS Agreement : 6/12/2005Article 31bis TRIPS Agreement : 6/12/2005

(first TRIPS amendment)(first TRIPS amendment)

allowing countries with inadequate allowing countries with inadequate production facilities to import medicines production facilities to import medicines produced under compulsory license in third produced under compulsory license in third countriescountries

......

under certain cumbersome conditionsunder certain cumbersome conditions

• Compulsory licenses are controversial Compulsory licenses are controversial but…but…

• 1000 United States1000 United States• 600 Europe600 Europe• 300 Japan300 Japan• 1-5 Developing countries1-5 Developing countries

Transition PeriodsTransition Periods

• Developed countries had Developed countries had 11 year (1/1/1996) year (1/1/1996)• Developing countries had Developing countries had 44 additional years additional years

(1/1/2000) to apply the TRIPS provisions following (1/1/2000) to apply the TRIPS provisions following date of entry into force (1/1/1995)date of entry into force (1/1/1995)plus plus 55 additional years to comply with the TRIPS additional years to comply with the TRIPS Agreement provisions on pharmaceutical patents Agreement provisions on pharmaceutical patents (1/1/2005)(1/1/2005)

• In view of special needs of LDCs, they had till 1 In view of special needs of LDCs, they had till 1 January 2006 to apply TRIPS with possible January 2006 to apply TRIPS with possible extension to allow them to “extension to allow them to “create a viable create a viable technological base”technological base”

• The Decision of the Council for TRIPS of 29 The Decision of the Council for TRIPS of 29 November 2005 called ‘Extension of the Transition November 2005 called ‘Extension of the Transition Period Under Article 66.1 For Least-Developed Period Under Article 66.1 For Least-Developed Country Members’ provides under paragraph 1 Country Members’ provides under paragraph 1 that:that:

• ““LDCs shall not be required to apply the LDCs shall not be required to apply the provisions of the Agreement, other than Articles 3, provisions of the Agreement, other than Articles 3, 4 and 5, until 4 and 5, until 1 July 20131 July 2013, or until such a date on , or until such a date on which they cease to be a least-developed country which they cease to be a least-developed country Member, whichever date is earlier.”Member, whichever date is earlier.”

• Par 7 Declaration on TRIPS and Public Health Par 7 Declaration on TRIPS and Public Health extends till extends till 1/1/2016 1/1/2016 for pharmaceutical protectionfor pharmaceutical protection

Need to…Need to…

• rebalance innovation incentives and the public interestrebalance innovation incentives and the public interest• realize that IPRs will not solve all problems (neither will TK prot)realize that IPRs will not solve all problems (neither will TK prot)• balance public and private rights at the international levelbalance public and private rights at the international level• promote coherence among different international agreements and promote coherence among different international agreements and

FTAsFTAs• expand civil society participation/consultations in national, expand civil society participation/consultations in national,

regional and international rules setting processes on IPRsregional and international rules setting processes on IPRs• focus on implementation of WIPO Development Agenda, link with focus on implementation of WIPO Development Agenda, link with

WTO negotiationsWTO negotiations• implement flexibilities, let IPRs work for you!implement flexibilities, let IPRs work for you!• build on Disclosure of Origin Momentumbuild on Disclosure of Origin Momentum• avoid adopting new IPRs before implementing existing onesavoid adopting new IPRs before implementing existing ones• carry out cost-benefit analysis of GI extension and registercarry out cost-benefit analysis of GI extension and register

MERCIMERCI

Fleur.claessens@unctad.org