Twist in the TRIPS tale

proponents of the global intellectual property rights (ipr) system have long claimed that patents and copyrights are essential for promoting innovation. Pharmaceutical companies, for instance, will think twice about investing millions in research for new drugs if they are not assured of making economic gains from a monopoly on the production of their invention. But iprs, as defined and governed mostly by the World Trade Organisation's (wto) Agreement on Trade-Related Aspects of Intellectual Property Rights (trips), are equally staunchly opposed. The detractors mainly comprise developing countries, which claim that intellectual property rules are written to benefit the rich and are against the interests of the poor.

It is this view that has recently received unequivocal support from an unexpected quarter. In May 2001, Clare Short, the uk secretary of state for international development, brought together six experts from the uk, the us, Argentina and India to form an independent Commission on Intellectual Property Rights (cipr). The panel was set up to explore whether the existing rules of ipr can promote development and reduce poverty. In a report released in September, the commission was clear in its verdict: iprs benefit those who have knowledge and inventive power (mostly rich countries), while increasing the costs of access for those without (poor countries). In other words, it notes that the balance of cost and benefits is strongly tilted in favour of industrialised, technologically advanced nations.

Intellectual property rights can do little to stimulate innovations in developing countries that lack the required technological and human capacity. However, they do end up increasing the cost of medicines and agricultural inputs for the poor. In this regard, the report describes developing countries as "second comers" in a world shaped to cater to the interests of the industrialised "first comers". Maintaining its plainspoken tenor, the document advises developing countries to either mould the ipr system to suit their economic, social and technological conditions, or -- where this is not possible -- reject it.
Striking a balance The ipr system works largely to promote private innovation, and is motivated by profit. It would, therefore, find it more beneficial to focus innovation on the needs of the rich -- who can pay for better quality seeds or agricultural technologies, or for medicines. In view of this, the report lays strong emphasis on ensuring that public funding makes up for the skewed balance by prioritising research that addresses the needs of the poor.

In the long and now monotonous fight between rich and poor countries on technology transfer, industrialised nations often hide behind global ipr laws. They cite patents held by private companies as an alibi to escape providing developing countries with advanced technologies.

The cipr report recommends that governments of developed nations offer incentives such as tax breaks to encourage companies to transfer technology to developing countries.

It also calls for increased public funding to promote indigenous technical capacity in developing countries, and commitments to ensure that the benefits of publicly funded research, at least, are made available to developing countries.
The right dose Large pharmaceutical companies are among the top beneficiaries of the present ipr system and, not surprisingly, its most diehard supporters. Their claim that iprs promote innovation is true, but in a limited sense. iprs encourage innovation and research on diseases found in the rich world where consumers have the money to spend on medicines. In doing so, they ignore diseases prevalent in poor countries since research on cures for afflictions of the poor is non-profitable. Given the current ipr system, which doesn't stimulate private companies to increase their research on such diseases, the commission's report calls for an increase in public funding to study health problems in developing countries.

It is also a well-known fact that patent protection increases the cost of medicines, putting them out of reach of the poor. Drug prices will skyrocket in developing countries once they are forced to strengthen ipr rules under the wto regime. The report warns countries against blindly implementing intellectual property rules that run counter to their public health policies. It recommends a differential pricing mechanism as well, which allows for prices of drugs in developing countries to be lower than those in the developed world. The document exhorts developing countries to make the maximum use of flexibility under trips to support their public health requirements.

Field tips
ipr rules have been the source of endless irritation for farmers in the developing world. While years of informal innovations by them in developing high-yielding and pest-resistant varieties are neither recognised nor rewarded by the global system, the rights of large seed corporations are stoutly defended by organisations such as the Union for the Protection of New Plant Varieties (upov).

Patents granted to these corporations, in turn, interfere with the rights of farmers in developing countries to reuse and exchange seeds -- a practice they have been following for generations. Developing countries should avoid granting patent protection for plants and animals, according to the cipr report. Instead, they should use the trips option of using a sui generis ("of its own kind" or unique) system, designed to suit their particular concerns.

Once again, the commission lays stress on increased public sector research oriented to the needs of poor farmers.

Touching on tradition
On the issue of treatment of traditional knowledge, particularly related to biodiversity, ipr laws are equally discriminatory. Attempts by corporations and individuals to patent traditional knowledge with no previous written record of the innovation have received wide publicity in recent years. For instance, a department of the University of Mississippi tried to patent the properties of turmeric for healing wounds -- a common traditional use in India. This move could only be countered by producing written evidence from ancient Indian texts.

The cipr report does not venture very far in recommending ways to protect such knowledge, other than suggesting that an all-encompassing sui generis system may be too specific and not flexible enough to accommodate local needs. It proposes coherence in the work of the various forums -- including the wto, World Intellectual Property Organisation (wipo) and Convention on Biological Diversity -- that are currently addressing this relatively new issue.

Don't trip up
The regime puts a strain on the capacities of developing countries, not just in developing a coordinated policy despite the lack of experienced and skilled personnel but also in the establishment and operation of a system to track ipr. To avoid diverting resources from already over-extended health and education budgets, the report suggests that developing countries should charge an administration fee from foreign companies, the main beneficiaries of the ipr system.

The final message for developing countries, quite clearly, is to adopt a far more proactive approach in choosing a system of intellectual property rights that meets their development objectives, rather than passively accepting a readymade system designed to serve other interests. These countries, states the cipr report, will have to come up with a strategy to deal with the risk that any further harmonisation of patent laws internationally could go against their interests. This would involve either seeking continued flexibility within the existing system, or an outright rejection.

Whether this document will influence global policy-making on ipr remains to be seen. Ramesh Mashelkar, director general of the Indian Council for Scientific and Industrial Research (csir), one of the six experts in the commission, believes it will have far-reaching impact. "I would like to believe that this report will be the proverbial straw that will eventually tilt the balance in favour of a more sympathetic hearing of developing world problems," he saysand adds: "I expect a lot of heat, dust and sound initially, but eventually there will be light at the end of the tunnel."