A call to improve intellectual property rights of developing countries
Commission on Intellectual Property Rights
Independent commission finds intellectual property rights impose costs on
most developing countries
and do not help to reduce poverty
In presenting its final report to the British government, the Commission on
Intellectual Property Rights declared the internationally-mandated expansion of
intellectual property (IP) rights unlikely to generate significant benefits for
most developing countries and likely to impose costs, such as higher priced
medicines or seeds. This makes poverty reduction more difficult.
The Commission also called on developed nations, the World Trade
Organisation (WTO) and the World Intellectual Property Organisation (WIPO) to
take the circumstances of poor countries and their development needs properly
into account when seeking to develop international IP systems.
The intensively researched, 180-page report is entitled Integrating
Intellectual Property Rights and Development Policy. It is the culmination
of much study and follows on more than a dozen meetings and workshops, 17
working papers, an exhaustive literature review of the field, visits to
several developed and developing nations and a major conference. The report
makes some 50 recommendations aimed at aligning IP protection with the goal of
reducing poverty in developing nations. Topics include IP and health;
agriculture; traditional knowledge; copyrights, software and the Internet; and
the role of WTO and WIPO in advancing developing country interests. The
Commission is an independent international body made up of Commissioners from
both developed and developing countries with expertise in science, law, ethics
and economics. The Commissioners come from industry, government and academia.
"Developed countries often proceed on the assumption that what is good
for them is likely to be good for developing countries," said Professor
John
Barton, Commission Chair and George E. Osborne Professor of Law, Stanford
University. "But, in the case of developing countries, more and stronger
protection is not necessarily better. Developing countries should not be
encouraged or coerced into adopting stronger IP rights without regard to the
impact this has on their development and poor people. They should be allowed to
adopt appropriate rights regimes, not necessarily the most protective
ones."
The Commission concludes that the intellectual property rights system, as a
whole is less advantageous for developing than for developed countries in
many areas of importance to development, such as health, agriculture,
education and information technologies. The system increases the costs of
access to many products and technologies that developing countries need.
The Commission report also concludes that the extension of IP rights globally
will diminish the degree of competition worldwide for many products and
services. For example, the degree of competition in developing country
markets for patented pharmaceutical products will diminish in 2005 when
major suppliers of generic versions of such medicines will have to apply
patent protection under TRIPS (WTO's Agreement on Trade-Related Aspects of
Intellectual Property Rights). "This is particularly important for those
countries where competition is already weak," said Barton.
"Developing countries participate in global intellectual property
systems as
'second comers' in a world that has been shaped by 'first comers,'" said
Barton. "They are now being urged to adopt a complex set of rules more
suited to advanced economies. When their economies were at comparable stages of
maturity, most developed countries did not follow the stringent
intellectual property standards they now advocate for developing
countries."
The Commission calls on developed nations to take the economic needs of
developing countries fully into account when seeking to craft international
intellectual property rights systems. Developed countries should pay more
attention to reconciling their commercial self interest with the need to
reduce poverty in developing countries, which is in everyone's interest, says
the report. Higher IP standards should not be pressed on developing
countries without a serious and objective assessment of their impact. The
impact of IP rights on poor people will vary according to socio-economic
circumstances. IP systems should be tailored to a country's state of
development and its particular circumstances, according to the report.
WTO, WIPO
The Commission also called on the international institutions principally
responsible for the development of global IP policy, WTO and WIPO, to take
into account the needs and interests of those adversely affected by IP
rights, not just the interests of potential beneficiaries of those rights.
According to the report, "The voice of developing countries and, in
particular, consumers needs to be better heard and the decisions taken
better informed by evidence of the impact of IP rights in those
countries. WIPO must give explicit recognition to both the benefits and the
costs of IP protection for developing nations."
"Equally, this applies to the evolution of policy with respect to the
digital media and the Internet," said Barton. "The temptation to
impose very
strict protection because of the ease with which software and other digital
media can be copied may diminish the very real benefits they could bring to
developing countries, particularly in accessing educational and scientific
documents at low cost."
Access to medicines
The Commission concludes that without the incentive of patents, it is
doubtful the private sector would have invested so much in the discovery and
development of medicines, many of which benefit both developed and
developing countries. However, the report finds that the IP system "hardly
plays any role in stimulating research on diseases particularly prevalent in
developing countries" unless there is also a substantial market in the
developed world.
In fact, as IP rights are strengthened globally, the overall cost of
medicines in developing countries is likely to increase unless steps are
taken to counteract this trend, according to the report. The report suggests
that developed and developing countries adopt a range of policies to improve
access to medicines. One means of obtaining medicines at lower prices, amongst
others discussed in the report, is for countries to use a mechanism called
"compulsory licensing."
Compulsory licensing allows a country to contract a third party to
manufacture a patented product if there are good reasons to do so (for
instance if the government considers the price of a medicine unjustifiably
high). In fact, the United States government envisaged its use when
negotiating the price of Cipro following the anthrax attacks last year.
The report also recommends use of differential pricing, which would allow
prices for drugs to be lower in developing countries, while higher prices
are maintained in developed countries. If this is to work, according to the
report, "then it is necessary to stop low priced drugs leaking back to
developed countries." Developing countries should also aim to facilitate in
their legal systems the ability to import patented medicines if they can get
them cheaper elsewhere in the world.
Developing countries should also make provisions in their law that will
facilitate entry of generic competitors as soon as the patent has expired on
a particular drug, says the report. "In developed countries, generic
competition causes prices to fall quite sharply," said Barton. "In the
absence of patents in developing countries, more people would be able to
afford treatments they need."
The Commission recognises that the IP system is one factor among several
that affects poor people's access to healthcare. Other important constraints to
access to medicines in developing countries are the lack of resources and the
absence of a suitable health infrastructure (including hospitals, clinics,
health workers, equipment and an adequate supply of drugs) to administer
medicines safely and efficaciously.
Patents on plants and traditional knowledge
The report discourages developing countries from providing patent protection
for plants and animals, as is allowed under TRIPS, because of the
restrictions patents may place on use of seeds by farmers and researchers.
It recommends developed countries respond constructively to the concerns of
developing countries about the patenting of their genetic resources and
associated traditional knowledge.
Patent applicants should be required to disclose the geographic source of
the genetic material from which their "invention" is derived, the
report
says. In this way, developing countries can be informed of proposed patents that
incorporate their resources and take action if their rights have been
overlooked.
The report urges other reforms as well to make it harder for commercial
interests to claim rights on what is already known in developing countries
(such as knowledge of the medicinal value of a native plant). According to
patent law, IP rights cannot be claimed on "prior art" -- knowledge
already
in the public domain. But some countries, the U.S. for instance, do not
recognise such knowledge when it comes from outside their own borders.
Therefore, the report recommends a broader definition of prior art. It
endorses the cataloging of traditional knowledge -- with the appropriate
consent of the holders of the knowledge. Examiners who weigh the validity of
patent applications could then check claims of "invention" against
existing traditional knowledge.
"India has been working with other countries to catalogue traditional
knowledge, particularly following our experience with invalid patent claims
on turmeric and basmati," said Ramesh Mashelkar, a Commissioner, and
Director General of the Indian Council of Scientific and Industrial Research
and Secretary to the Department of Scientific and Industrial Research in
Delhi, India.
Trips
The Commission recommends that developing countries take advantage of the
flexibilities built into the international TRIPS treaty. It also recommends
that least developed countries be allowed a longer period of time to phase
in TRIPS provisions -- until at least 2016.
"TRIPS allows compulsory licensing and other means of promoting
lower-priced generic drugs and increased competition-these are valuable tools
for developing countries," Barton said. "But countries should have to
apply TRIPS based on their own development milestones, not based on an arbitrary
date."
Developing countries need to shape their IP laws to promote development
generally and keep in mind some of the negative impacts of overly generous
IP protection, according to the report. For instance, as some developed
countries have found, the patenting of technologies needed to conduct
research can provide an incentive for research, but it can also inhibit
research, which needs to make use of those protected technologies. The
report considers how, for example, the search for an effective malaria
vaccine may be complicated by the large number of patents on the genetic
material required in the research. Developing countries should also restrict
the patenting of minor advances, which can create a legal maze of patent
claims, according to the report.
"But overall, IP rights are only one factor among many in the
development
process," said Gill Samuels, a Commissioner and Senior Director of Science
Policy and Scientific Affairs (Europe) at Pfizer Ltd, Sandwich, UK. "Their
importance should be recognised, but not overstated. Even the complete
absence of IP rights would not solve the lack of sufficient resources for
adequate health facilities, health workers and medicines for all in
developing nations."
In particular, countries need other measures to stimulate development in the
interests of poorer people, including increased public funding for health
and agricultural research, Barton said. "The IP system is not well suited
to
encouraging this." Neither is the international IP system particularly
effective at promoting the transfer of technology or foreign investment,
despite this being an objective of TRIPS, the report found.
To accomplish these goals, countries need a combination of increased
international funding; specific initiatives to support research into areas
that lack a lucrative market (for instance, many drug companies hesitate to
develop malaria drugs or vaccines because most countries that need them
cannot afford them); and support for increased education and training within
developing countries.
Further information on the Commission is available at
URL: http://www.iprcommission.org
NOTE: The full report of the Commission, as well as an executive summary,
will available online in Word and PDF at the above website. Hard copies
can be requested by email: ipr@dfid.gov.uk.
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