Intellectual Property Rights

Implications for Development

Fleur Claessens
 What is Intellectual Property?
• … books, CD’s, video games, paintings,
staplers, bags, fabrics, planes, food/drinks,
pharmaceuticals, plant varieties, computer
chips, cars, music, broadcasts, sound
recordings, etc…
• …an IP right provide the right holder with
an exclusive right to stop others
• ..IP right holder may provide licenses
• …IP rights are territorial in nature
 Forms of Intellectual property
Rights
• Patents
• Trade Marks
• Designs
• Copyrights
• Geographical Indications
• Industrial Designs
• Trade Secrets
• Utility Models
• Traditional Knowledge (?)
 Patent requirements

• New/novel
• Inventive step/non-obviousness
(not obvious to someone skilled in
the art)
• Industrial Applicability
• Patentable subject matter
 What is patentable?

• “Everything under the sun that is made

by man.“ Diamond v. Chakrabarty
1980 US Supreme Court
• Ideas/inventions are patentable
 Exclusions from patentability
• Discoveries are not patentable:
Einstein could not patent his celebrated law that E = mc^2;
nor could Newton have patented the law of gravity. Such
discoveries are “manifestations of . . . nature, free to all men
and reserved exclusively to none”
• Literary, dramatic, musical or artistic works
• Schemes, rules, games, computer programs as such
• Methods of medical treatment
• Contrary to public policy and morality: Those which by
publication or exploitation might result in offensive, immoral
or anti-social behavior. Current debate life patents/GM Food
• Plant and animal varieties (in EU not in US)
 How to obtain a patent?
• Domestic patent/IP office: filing, obtain priority
date
• European patents: a bundle of patent rights at the
European patent office
• International level: WIPO PCT

Application requirements:
• Description as how the invention works
• Claim covering the scope of the legal monopoly
claimed by the patentee
• Examination and publication
 Copyright
• Copyrights protects the rights of authors of literary and
artistic works
• Copyright is in essential a negative right which prevents
others from making copies of the work of an author
• No copyright in a pure idea/news/simple
works/information itself
• Expression/idea dichotomy
• If sufficient ‘selection, judgment and experience’ or
‘labour/skill and capital’ copyright can be granted, even in
a database (so not the content in the data base but the
compilation itself), in EU separate database right, not in
the US.
• Moral rights versus economic rights
 Rationale behind IPRs
Patents
To stimulate innovation/encourage investment the
inventor receives an exclusive right to his invention
in exchange for disclosure of the invention in such a
way that it allows replication, the inventor receives
a limited amount of time to recoup his investment

Trademarks
Protection of goodwill and reputation

Copyright
Protection of creativity
 Innovation: Methods and Factors
“Innovation is the development and implementation of an improved
(incremental) or new (landmark) product or process with success in a
business activity / society”
• Methods:
 Formal innovation
 Scientific method (evidence of efficacy and/or efficiency)
 Marketing strategies (new utility, design, process)
 Informal or Traditional
 Experience/belief
 intergenerational
 individual or collective
 Functional
• Factors:
 Culture, education, inventiveness/creativity, capital, enabling
environment, linkages, supplychain management, marketability,
etc.
 Why are IPRs important?
• IPRs allow control over technology, signs
and creations
• Original Purpose: to stimulate innovation
and creativity by compensating the
creator/innovator for their intellectual
efforts
• Lately: incentive to investment / change in
market players
--big multinationals
 The TRIPS Agreement

…sets minimum standards

…is part of a package deal – WTO Agreement
…is signed by 153 parties… is subjected to
dispute settlement body
...contains enforcement mechanisms
...is subjected to National Treatment and
Most-favoured-Nation Treatment (MFN)
Principles
 Contemporary Challenges in IPR negotiations...
• GIs
1. Creation of a multilateral register for wines and spirits
2. Extending the higher level of protection beyond wines and spirits
3. Linkage between GIs and the agriculture negotiations – clawback for terms in
common usage

• Disclosure of Origin Measure

1. Legal consequences: Voluntary or not, administrative or patent ability
requirement (revoke or criminal sanction)
2. Linked to CBD concepts ABS and PIC
3. Linked to WIPO or WTO

• Implementation of the WIPO Development Agenda

• Enforcement (WTO US versus China Panel Report)
• Ongoing norm setting activities / FTAs
• Technology Transfer
• Technical Assistance and Cooperation
 Why are IPRs controversial?

IPRs
• … create semi-monopolies also covering goods that
might be essential to society (e.g. pharmaceuticals and
environmentally sound technologies) /raises prices
(higher than production costs)
• …limit access to textbooks, educational material,
information
• …impacts on reverse engineering and imitation
• …exceptions are pushed to the limit/scope is widened:
– extension of subject matter - - patentability of life / software;
– extension of term of protection -- 70 years of copyright protection;
– creation of new rights -- non original databases;
– over relaxation of granting of patents -- lack of adequate description;
– inclusion of IP in trade, investment and stand alone agreements;
– primacy of private rights of public rights
 Some facts
• Swift pace of technological transformation technology
has become important in all economic activities

• International collaborations have led to the globalization

of all economic and technological activities

• Much more regulation!

 3 countries concentrate around 60% of applications

 5 countries account for above 80% of royalties and fees

recipients of which above 70% relates to intra-firm
payments
 The Public Interest
• Promotion of innovation
• Public health and access
to medicines “Whenever there is a
• Nutrition and Food conflict between human
security rights and property rights,
• Technology transfer
the former must prevail”
• Competition policy
Abraham Lincoln
• Human rights
• Development
• Fight against poverty
• Environmental
protection
• Education
 Socio-economic development
• Stages of development
• Sophistication of their industrial base,
including cultural creative industries
• Coherence with related policies (national
innovation systems; industrial, trade,
competition, FDI policies)
• Sectoral policies: health, education,
infrastructure
 IPRs and Development an integrated model

LEVELS OF
DEVELOPMENT

LOW LEVEL

INTERMEDIATE
LEVEL
INTELLECTUAL
PROPERTY
RELEVANCE
HIGH LEVEL
LOW LEVEL

HIGH LEVEL
IMITATION APPLICATION INNOVATION
LEARNING CURVE
 Development IPR Solutions
• WTO Doha (Development) Round
Doha Round Declaration 14 November 2001
Doha Declaration on TRIPS and Public Health

• WIPO Development Agenda (adopted September 2007)

2004 Initiative by group of developing countries lead by
Brazil and Argentina / development component in WIPO
as UN agency
– Use of flexibilities
– Transparency in technical assistance activities
– Development aspect in all norm-setting activities
 Doha Ministerial Declaration
14/11/2001
• “implementation and interpretation of the TRIPS in a
manner supportive of public health, by promoting both
access to existing medicines and research and development
into new medicines” (par 17)
• “the TRIPS Council shall be guided by the objectives and
principles set out in Articles 7 and 8 of the TRIPS
Agreement and shall take fully into account the
development dimension” (par. 19)

• Separate Declaration on the TRIPS Agreement and Public

Health
 Technical Assistance

• The Doha Declaration reconfirmed that

technical cooperation and capacity building
are core elements of the development
dimension of the multilateral trading system.
• 29/11/2005 TRIPS Council Declaration:
…requests LDCs to supply technical and
financial cooperation needs in order to
implement TRIPS
 Sierra Leone and Uganda - communications to the WTO
TRIPS Council, titled ‘Priority Needs for Technical and
Financial Cooperation’

Overview of needs in terms of …

 Administrative reform
 Short and long term goals
 IP policy and regulatory framework
 Administrative reform
 Development of IP curriculum and general public training
 Positive IPR agenda
 Promotion of traditional knowledge (museums, national gallery etc,
formalization of music industry etc…)
 Train police and judiciary
 Improve cooperation between players (government departments,
private sector, farmer organisations, music industry, police,
customs…)
 Value edition in food and drinks>GI protection (market branding and
marketing efforts)
 Provide management services to SMEs
 Use public domain knowledge, avoid reinventing the wheel
 Find niche / comparative advantage, “specialization is the need for
civilization”
 Declaration on the TRIPS Agreement and
Public Health 14/11/2001
• “we recognize the gravity of the public health problems
afflicting many developing and least-developed countries,
especially those resulting from HIV/AIDS, tuberculosis,
malaria and other epidemics” (par 1)

• “ we recognize that IP protection is important for the

development of new medicines. We also recognize its effects
on prices” (par 3)

• “we agree that the TRIPS does not and should not prevent
members from taking measures to protect public health,
TRIPS should be interpreted and implemented in a manner
supportive of public health and promote access to
medicines” (par 4)
• “Each member has the right to grant compulsory licences
and the freedom to determine the grounds upon which
such licences are granted” (par 5b)

• “each member has the right to determine what constitutes

a national emergency or other circumstance of extreme
urgency (par 5c)

• “leave each member free to establish its own regime for

exhaustion without challenge, subject to the MFN and
national treatment” (par 5d)
 Compulsory license:
Right to use the patent without
permission of the patent holder subject to
certain conditions

(Art. 31 TRIPS)
 Compulsory Licensing
Article 31 TRIPS

(a) authorization of such use shall be considered

on its individual merits;
(b) such use may only be permitted if, prior to
such use, the proposed user has made efforts to
obtain authorization from the right holder on
reasonable commercial terms and conditions
and that such efforts have not been successful
within a reasonable period of time. This
requirement may be waived by a Member in the
case of a national emergency or other
circumstances of extreme urgency or in cases of
public non-commercial use.
 Article 31 TRIPS
(c) the scope and duration of such use
shall be limited to the purpose for
which it was authorized
(d) such use shall be non-exclusive;
(e) such use shall be non-assignable
(f) any such use shall be authorized
predominantly for the supply of the
domestic market of the Member
authorizing such use;
Paragraph 6 TRIPS Declaration of TRIPS and
Public Health addressed the difficulties WTO
Members with limited pharmaceutical
production capacity have in making effective use
of the compulsory licensing:

“We recognize that WTO Members with insufficient or no

manufacturing capacities in the pharmaceutical sector
could face difficulties in making effective use of
compulsory licensing under the TRIPS Agreement. We
instruct the Council for TRIPS to find an expeditious
solution to this problem and to report to the General
Council before the end of 2002”
Contentious points:
--countries eligible to export the
generic medicine

--the limited scope of the diseases

being allowed for CL

--anti-diversion measures to
prevent parallel import of medicines to
other countries rather than the intended
beneficiary
• Waiver Decision: 30/8/2003
• Article 31bis TRIPS Agreement : 6/12/2005
(first TRIPS amendment)

allowing countries with inadequate

production facilities to import medicines
produced under compulsory license in third
countries
...
under certain cumbersome conditions
• Compulsory licenses are controversial
but…

• 1000 United States

• 600 Europe
• 300 Japan
• 1-5 Developing countries
 Transition Periods
• Developed countries had 1 year (1/1/1996)
• Developing countries had 4 additional years
(1/1/2000) to apply the TRIPS provisions following
date of entry into force (1/1/1995)
plus 5 additional years to comply with the TRIPS
Agreement provisions on pharmaceutical patents
(1/1/2005)
• In view of special needs of LDCs, they had till 1
January 2006 to apply TRIPS with possible
extension to allow them to “create a viable
technological base”
• The Decision of the Council for TRIPS of 29
November 2005 called ‘Extension of the Transition
Period Under Article 66.1 For Least-Developed
Country Members’ provides under paragraph 1
that:
• “LDCs shall not be required to apply the
provisions of the Agreement, other than Articles 3,
4 and 5, until 1 July 2013, or until such a date on
which they cease to be a least-developed country
Member, whichever date is earlier.”

• Par 7 Declaration on TRIPS and Public Health

extends till 1/1/2016 for pharmaceutical protection
 Need to…
• rebalance innovation incentives and the public interest
• realize that IPRs will not solve all problems (neither will TK prot)
• balance public and private rights at the international level
• promote coherence among different international agreements and FTAs
• expand civil society participation/consultations in national, regional and
international rules setting processes on IPRs
• focus on implementation of WIPO Development Agenda, link with WTO
negotiations
• implement flexibilities, let IPRs work for you!
• build on Disclosure of Origin Momentum
• avoid adopting new IPRs before implementing existing ones
• carry out cost-benefit analysis of GI extension and register
 MERCI

Fleur.claessens@unctad.org