E-drug: The Economist on CIPR
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[copied as fair use].
Economist 12th 2002
Editorial
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.
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Science section - Feature article:
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.
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.