[Ip-health] The Economist on CIPR

[Rachel_COHEN@msf.org]

Economist 12th 2002

How poor countries can avoid the wrongs of intellectual-property rights

THE public will learn that patents are artificial stimuli to improvident
exertions; that they cheat people by promising what they cannot perform;
that
they rarely give security to really good inventions, and elevate into
importance
a number of trifles...no possible good can ever come of a Patent Law,
however
admirably it may be framed.

Hardly an argument you might expect The Economist to endorse. And yet this
passage appeared in our pages in 1851. In the mid-19th century, The
Economist
believed that patents hindered rather than helped growth, by restricting
the
free use of one man's ideas by another. By all means let inventors be
rewarded,
we argued, but by trying their luck in the open market. Patents, like
protection, were an enemy of free trade.

How times change. In today's knowledge economy, patents seem to be central
to
western notions of prosperity and international trade. Signing on to the
global
agreement on intellectual property, called TRIPS, is now part and parcel of
membership of the World Trade Organisation.

Most of the world's people live in countries which either do not have, or
do not
enforce, intellectual-property rights. Not for much longer, however: TRIPS
requires even the least-developed countries to have some minimum protection
in
place by 2006. Whether this is good for the poor is hotly debated. America,
which has the most extensive and expensive national-patenting system in the
world, preaches that patents help to foster growth in poor places, since
they
stimulate domestic innovation, boost foreign investment and improve access
to
new technologies.

Nonsense, retort many poor-country governments. Western-style
intellectual-property protection brings many costs and few benefits. Patent
systems are expensive to implement, draining scarce money and trained
manpower
from other more pressing concerns. Patents hurt, rather than help, domestic
industries, which are often based more on copying than on innovating. And
in the
process, western patent rules prevent poor people from getting life-saving
drugs, interfere with age-old farming practices and allow foreign pirates
to
raid local biodiversity or traditional handicrafts, without getting
permission
or paying compensation.

Into this fray now steps a study by an international commission set up by
the
British government to examine how intellectual-property rights can help or
hinder developing countries (see article). It questions the doctrine that
patents are good for the poor. There is little evidence to show that truly
downtrodden places which introduce robust intellectual-property protection
reap
any of the much-touted benefits. Certainly, patents matter greatly to some
industries, such as pharmaceuticals. But putting in a rigorous patent
system
will not make Angola a hotspot of biotechnology innovation any time soon; a
licence to drive is little use without a car.



For richer, for poorer
Rich countries should remember this when they seek to impose their
intellectual-property regime on the rest of the world. It is entirely
reasonable
for the world's poorest countries to argue that they need until 2016, at
least,
to adopt and enforce patents on pharmaceuticals. This stay of execution
should,
indeed, be extended to all forms of intellectual property. Poor countries
should
also be wary of any provisions in trade deals that try to impose stronger
intellectual-property standards than TRIPS requires, or of any moves
towards
universal, one-size-fits-all patents in such controversial areas as
biotechnology. Rich countries should accept that considerations of how
intellectual-property rights affect poor countries are not just a concern
of
overseas-aid agencies, but play a part in broader trade and economic
relations
too.

That is not to reject intellectual-property rights in the poor world
altogether.
Applied in the right way and at the right moment in development, they offer
opportunities not threats to poor people. Some developing countries, such
as
India and China, whose industrial-scale copying of other people's products
alarms Western businesses, are sufficiently advanced to support the sort of
innovation that would benefit from patents. They should bring their systems
up
to scratch, for the sake of their own industry. Even the poorest countries
can
profit from well-designed intellectual-property protection. Senegal, for
example, has thousands of musicians who would benefit from copyright
enforcement.

Carefully worked-out policies for protecting intellectual property will not
solve developing countries' bigger problems, such as inadequate health
care,
lousy schools and sheer poverty. But if they are adapted to fit individual
countries' circumstances, they can play a helpful role in nurturing the
domestic
industries that lasting growth requires.

----------------


An important new study shows the promise, and pitfalls, of
intellectual-property
rights for the poor

INTELLECTUAL-PROPERTY rights (IPR), which embrace patents, copyright,
trademarks
and trade secrets, were once considered an esoteric, and slightly dull, bit
of
commercial law.

No longer. Today, IPR law is the focus of intense interest, and it is not
just
lawyers who are paying attention. The original purpose of patents was to
encourage innovation, and thus growth, by creating an incentive for
inventors to
disclose the details of their inventions in exchange for a limited monopoly
on
exploitation. Some argue that the modern system of IPR law is having the
opposite effect delaying the diffusion of new technology.

John Barton, a law professor at Stanford University, wants to see both rich
and
poor countries start thinking of IPR more as a development tool, and for
them to
reconsider the notion that strongly protecting the rights of inventors is
automatically good for all. For the past year, Dr Barton has chaired the
Commission on Intellectual Property Rights, a body of lawyers, academics, a
bio-ethicist and an industry executive convened by Britain's Department for
International Development to look at how IPR can work to the benefit of the
world's poor countries.

The commission's report, published on September 12th, sets out detailed
recommendations for how developing countries should craft IPR to suit their
conditions. Its central message is both clear and controversial: poor
places
should avoid committing themselves to rich-world systems of IPR protection
unless such systems are beneficial to their needs. Nor should rich
countries,
which professed so much interest in sustainable development at the recent
summit
in Johannesburg, push for anything stronger.



All together now
There was a time when countries could go their own way on
intellectual-property
rights, and introduce legal protection for creators whenever they thought
it
appropriate. For most of the 19th century, America provided no copyright
protection for foreign authors, arguing that it needed the freedom to copy
in
order to educate the new nation. Similarly, parts of Europe built their
industrial bases by copying the inventions of others, a model which was
also
followed after the second world war by both South Korea and Taiwan.

Today, however, developing countries do not have the luxury to take their
time
over IPR. As part of a trade deal hammered out eight years ago, countries
joining the World Trade Organisation (WTO) also sign up to TRIPS
(trade-related
aspects of intellectual-property rights), an international agreement that
sets
out minimum standards for the legal protection of intellectual property.
The
world's poorest countries were given until 2006 to comply in full with the
requirements of the treaty.

Contrary to popular perception, TRIPS does not create a universal patent
system.
Rather, it lays down a list of ground rules describing the protection that
a
country's system must provide. These extend IPR to include computer
programs,
integrated circuits, plant varieties and pharmaceuticals, all of which were
unprotected in most developing countries until the agreement. Patent rights
are
valid no matter whether the products are imported or locally produced, and
protection and enforcement must be extended equally to all patent holders,
foreign and domestic.

Although many poor countries feel that TRIPS gives them a raw deal all cost
and
scant benefits few want to see the agreement dismembered or removed from
the
WTO, according to Rashid Kaukab, at the South Centre, a think-tank based in
Geneva. That is largely for fear of what might take its place. Instead, a
few
developing countries, such as India and Brazil, are starting to flex their
muscles when it comes to the battle between western standards of IPR
protection
and matters of public interest, such as health and farming. As the
commission
points out, the wording of TRIPS gives poor countries considerable latitude
to
look out for themselves when introducing new systems of IPR protection. It
also
suggests a few ways that they can make the most of this flexibility in a
number
of important areas:

Drugs
Much of the recent debate over the impact of IPR on the poor has centred
on the issue of access to expensive medicines. On paper, many of the
world's
least-developed countries have laws which provide patent protection for
pharmaceuticals. In practice, few enforce them. Spurred on by a victory in
April
2001 against drug companies fighting patent reform in South Africa,
developing
countries issued a declaration at the WTO meeting in Doha last year. This
asserted the primacy of public health over IPR. They resolved that the
world's
least-developed countries should be given at least until 2016 to introduce
patent protection for pharmaceuticals.

On September 17th, the WTO council responsible for TRIPS will consider a
far
trickier proposition in the declaration: how to make compulsory licensing
(the
manufacture and marketing of a patented drug without the patent-holder's
consent) work for the poorest. TRIPS already permits compulsory licensing
under
certain conditions, including national emergencies. This is fine for
countries
such as Brazil, which have domestic drug industries to copy the medicines.
Brazil has, indeed, used the threat of compulsory licensing to wring price
discounts out of drug companies, a ploy which the commission, somewhat
controversially, supports.

The problem is what to do with countries which have no drug makers. For the
moment, they can import generic copies from the likes of India, but come
2006,
when those exporters are supposed to have fallen in with the TRIPS line,
who
will supply the drugs?

Education and research Alan Story, a specialist in IPR at the University of
Kent, in Britain, reckons that copyright, particularly as it pertains to
education and research, will be the next big battleground. Those countries
that
have signed up to TRIPS have also accepted international copyright rules.
Although these allow some unauthorised copying for fair use or personal
consumption for education or research, the commission worries that these
exceptions are too limited, and that copyright may hamper access to
textbooks,
journals and other educational material in poor countries, by requiring the
consent of, and likely payment to, the publisher prior to copying.

The commission is even more worried about the Internet, which has great
potential for broadening access to education in poor countries, but in
which
encryption technologies can override the principle of fair use. Some
publications, such as the British Medical Journal, allow free online access
for
people in poor countries. The commission would like to see more of this. In
the
meantime, it recommends that developing countries allow users to sneak
round
technical barriers such as encryption, to gain access for fair use. Not
surprisingly, software makers are unenthusiastic.

Traditional knowledge The most glaring conflict between rich and poor over
intellectual property comes from the misappropriation of traditional
knowledge
such as ancient herbal remedies that find their way into high-priced
western
pharmaceuticals without the consent of, or compensation to, the people who
have
used them for generations. Often, patent examiners are simply unaware that
the
plant variety which an enterprising businessman is trying to patent has
been
used for centuries by a tribal community half a world away. The commission
recommends that countries create databases to catalogue such traditional
knowledge (India is already doing so), and urges that consulting such
databases
should be made a mandatory part of patent examinations the world over.

More than this, however, Kamal Puri, a lawyer at the University of
Queensland,
Australia, argues that new systems of IPR protection are needed for
traditional
knowledge. That is because its communal ownership, uncertain date of
creation
and unwritten form does not fit the requirements of western systems of IPR.
On
September 17th, a model law, drafted by Dr Puri and co-sponsored by UNESCO,
will
be unveiled at a meeting of Pacific island states in New Caledonia. The law
gives traditional users jurisdiction over native knowledge, and requires
that
those who wish to commercialise it must seek the users' consent. All
transactions must be registered with a tribal authority, which will deal
with
subsequent disputes.

Even when armed with these weapons, poor countries will have a hard time
deploying them. Drafting IPR legislation and setting up a patent office
that has
modern information-technology systems and trained examiners does not come
cheap
or easy. Neither does establishing judicial, customs and competition
authorities, and police services to enforce IPR rules. The World Bank
reckons
that it costs at least $1.5m to create a working system, plus recurrent
costs.

Moreover, inventors in poor countries find it tough to use patent systems
in the
rich world. Merely securing a patent from America's patent office costs at
least
$4,000. Defending it in court can cost millions. The commission identifies
several ways in which rich countries could open their domestic IPR systems,
including discounted fees and subsidised technical assistance. It also
suggests
they should help poor countries to set up their own systems without
saddling
them with rich-world standards until they are ready to benefit from them.
Inventing a way to do that might be worth a patent in its own right. Those
who
heed the commission's report, however, might well resist the claim.

Websites

WTO members issued the Doha Declaration on TRIPS. TRIPS signees
automatically
join the Berne Convention. Medicins Sans Frontieres wants to see generic
drugs
marketed at lower prices, a move opposed by the International Federation of
Pharmaceutical Manufacturers' Associations. The British government has set
up
the Commission on Intellectual Property Rights. See also the World
Intellectual
Property Organisation and the US Patent Office.



*****************************************
Rachel M. Cohen
U.S. Advocacy Liaison
Campaign for Access to Essential Medicines
Doctors Without Borders/M=E9decins Sans Fronti=E8res (MSF)
6 East 39th Street, 8th Floor * New York, NY 10016 * USA

Tel: +1-212-655-3762
Mobile: +1-917-331-9077
Fax: +1-212-679-7016
E-mail: rachel_cohen@newyork.msf.org
http://www.doctorswithoutborders.org
http://www.accessmed-msf.org