September 2005

Experts urge reform of international patent system at eve of WIPO assembly

Maastricht -- An international seminar to discuss the contribution of Intellectual Property Rights to development has called on the World Intellectual Property Organization (WIPO) to pay greater attention to the diverse needs and technological capacities of developing countries, instead of focusing on deeper harmonization of intellectual property standards.

Held at the eve of the WIPO General Assembly (taking place between 26 September to 5 October in Geneva), forty scholars and policy analysts meeting at United Nations University Institute for New Technologies (UNU-INTECH) warned that the current IP regime is undermining agreed sustainable development targets.

Of particular concern is the implementation of the Doha Declaration on the TRIPS Agreement and Public Health, passed at the 4th Ministerial Conference of the World Trade Organization.

Noting that the current system has become greatly skewed in favour of protecting private knowledge goods, without taking into account the social costs incurred, participants urged that greater efforts be paid to building an effective framework to govern the public knowledge arena, and strengthening local capabilities to develop alternatives to patented products.

The keynote speaker, Professor Richard Nelson (Columbia University) cited recent independent studies that have arrived at the general conclusion that "...while patents are the primary incentive for profit-motivated invention in some key technologies, they are actually causing harm in other areas, including some 'high-tech' industries involved primarily in R&D."

Several proposals on alternative ways of rewarding technological innovations that are in the public interest were discussed, including a new US bill � The Medical Innovation Prize Fund Act (HR 417) � that would create a fund to compensate innovators when they bring new pharmaceuticals to the market.

In marked contrast to traditional patents, pharmaceutical companies would need to provide proof of the incremental therapeutic benefits of a new product, in order to receive compensation.

The outcome of the meeting will provide input for the 'Friends of Development' Group, which has called for the establishment of a Development Agenda at WIPO. An executive summary of the Maastricht seminar (attached below) will be presented at the WIPO meeting.

International Seminar - Contributions to the Development Agenda on Intellectual Property Rights

TRIPS as it stands is against the interests of developing countries, and needs reform. In developing their own patent law, developing countries need to recognize that there is now near consensuses among informed observers that patent law and practice have, in some cases, overshot, and need to be reformed. That is the burden of the recent NAS/NRC report on "A Patent System for the 21st Century.
(Richard Nelson � George Blumenthal Professor of International and Public Affairs, Business, and Law, Columbia University and keynote speaker at the Maastricht Seminar)

Executive Summary

As a result of an initiative of academic professors and researchers, the International Seminar � Contributions to the Development Agenda on Intellectual Property Rights - took place at the United Nations University (UNU-INTECH), in Maastricht, on September 23 and 24, 2005.

The main focus of the Seminar was to explore important issues raised in the realm of the proposal presented at the World Intellectual Property Organization (WIPO) by a Group of developing countries � the Group of Friends of Development � centered on existing challenges to accommodate development goals with the generation of innovation and, more specifically, with IP use (www.wipo.org)

The document prepared by the Group of Friends of Development provokes important reflections on four main dimensions: norm setting on IP, technology transfer, WIPO's mandate, and technical cooperation. During the two days of the Maastricht Event discussions explored evidences from economics of innovation and different policy frameworks, borrowing from cases of specific technological areas in order to address the main points presented within the Development Agenda proposal.

Six papers were prepared to support the debates, covering the following topics:
  • the structuring and the functioning of IP systems;
  • IPRs and competition policies;
  • IPRs and knowledge-intensive sectors � pharmaceutical, biotechnological, and IT
  • alternatives for accessing knowledge; and
  • IPRs, technology, and the challenges of development.

    The main issues that emerged from the Seminar can be summarized as follows:

    1. IP rights are economic rights. They are granted not as an end in themselves, but only as a means to specific goals: the promotion of creativity and innovation, culture and science. However, IPRs can have a negative effect not only on economic and social welfare, but also on innovation itself.

    2. Attribution of IPRs should be allowed only insofar as it does not undermine the basic principle of the open science system. Free and universal access to scientific knowledge is at the same time a fundamental engine of innovation and a constitutive principle of democracy.

    3. The task of constructing better and more balanced IPR regimes which facilitate their role as instruments of innovation incentives is an issue for both developing and developed countries;

    4. Any extension of IPRs, whether in terms of subject matter, length, type or jurisdiction of protection must be based on clear evidence of their net benefits.

    5. The global framework for intellectual property laws must permit nations to experiment with different approaches. Excessive harmonization should be avoided, in order to protect the space for innovation in the mechanisms of supporting innovation and creativity.

    6. Countries must also have the flexibility to adapt intellectual property rights, and exceptions and limitations to those rights, to their stage of development and local circumstances.

    7. Bilateral trade agreements with TRIPS plus provisions undermine multilateralism and the existing flexibilities. The further expansion and strengthening of protection entails additional burdens and social costs, in particular for developing countries.

    8. IPRs are among a range of inducement mechanisms for innovation. Several studies have shown that IPRs are important inducements in some sectors but not in others.

    9. IP policy should be coherent with and complementary to innovation, competition, and regulatory policies.

    10. Patents' ultimate goal should be to stimulate investment in inventive activity rather than serving as an asset for rent seeking and litigation.

    Participants agreed on the following proposals:

  • To develop an international network of researcher's from both developing and developed countries to act as a locus for debates on IPR, contributing to policy making at both the national and international levels with the explicit aim of enhancing global creativity, inventive activity, and innovation and to signal where necessary the possible negative impacts of IPR on global economic welfare.

  • To reflect on alternative IPR models addressing current imbalances in the global IPR regime, as well as the implications for global welfare, competition and access to knowledge of changes in IPR being negotiated at bilateral and multilateral levels

  • To broaden the scope of academic and policy research on IPR, so as to include fully the implications of IPR for creativity, inventive activity, innovation, and capacity development in developing countries. Such intellectual broadening will need to involve the integration of different actors, such as - academic researchers, policy makers, international negotiators, and civil society organizations, as well as the integration of different relevant disciplines for IPR: economy, law, management of technology, political science, and international relations

    Organizers and sponsors: United Nations University (UNU-INTECH), Prof. Luc Soete and Rishab Ghosh; National Institute of Industrial Property (INPI, Brazil) Jorge �vila, Vice-President, and Maria Beatriz Amorim P�scoa, Director of Institutional Partnership; University of Columbia Catch-up Project, Prof. Richard Nelson; Institutions, Organizations and Strategies, Network on Globalization and Development (REDES/Ford Foundation), Ana C�lia Castro and Leonardo Burlamaqui, project coordinators; Laboratory on Innovation and Intellectual Property Rights (Federal University of Rio de Janeiro, CCJE, Institute of Economics and Funda��o Jos� Bonif�cio), Alcino C�mara Neto and Luiz Martins de Melo.

    The main objectives of this meeting are to promote networking among leading scholars concerned with the impact of IPRs on development and to find ways for cross-subsidisation between that research network and policy makers who may lead economic transformation.

    About UNU-INTECH
    The Institute for New Technologies of the United Nations University (UNU-INTECH) was set up in Maastricht, The Netherlands by the Council of the United Nations University in 1990. UNU is an international community of scholars engaged in research, postgraduate training and the dissemination of knowledge aimed at furthering the purposes and principles of the Charter of the United Nations. Within the UNU family, INTECH conducts research and policy-oriented analyses and undertakes capacity building in the area of new technologies: the opportunities they present, the vectors for their generation and diffusion and the nature of their economic and social impact, especially in relation to the developing countries.

    For more information please contact: Wangu Mwangi, Communications Coordinator UNU-INTECH ([email protected]. Tel: +31-43 350 6365)