We are living in the times when poor is getting poorer and rich, the richer. Why, if you ask, is this truer today than yesterday; the answer lies in the fact that passions about the anniversaries we often boast about are affecting us least. But anniversaries about which we are so ignorant are transforming our lives in far greater proportion than we would imagine. The 16 years of TRIPS and its yet to be ascertained impact is such a solid example of our consistent exposure to the power or lack of negotiating power, total void of experts who can stand in front of delegations of US, EU & Japan and now Korea, China and Australia.
Basically the position of the developed world about trade negotiations can be summarised in following way: “Do as we say, not as we did!” Yes, it is very much true. Developed world consistently refused to respect the intellectual property rights until on a fine Sunday morning they realised that the competitive advantage in trade, R&D and technology development & commercialisation is waning. For many years US Congress refused to grant copyrights to foreigners on the basis of rationale that it will hinder the spread of mass literacy and refuse the liberty to enjoy the literature. No doubt, be not be surprised; most who suffered due to this were the British authors. Another example: Swiss Federal Councillor Brenner during the debate of patents in 1906 asserted that patent system should be adopted to the interests of our own industries.
So, cut the shot and arrive at 1995. When TRIPS was implemented across the countries on the threat that obligation to it is directly proportional to the survival of membership of WTO. The role of private corporates in pushing for the provisions in the trade negotiations of the Uruguay round is well known. Mind well, TRIPS was in no manner a think tank like academic initiative. It was well devised strategy, carved and sharpened by industry leaders like pharma, semiconductors, computer software, entertainment etc. Basically IBM and Phizer were the two frontline companies which lobbied to drive the point to home of policymakers in US that newly industrialised countries like Japan and Korea are copying the technology and fastly catching up. So, failure of developing countries in registering their resistance, the highly sophisticated coercion tactics used during the negotiations and great degree of asymmetry in negotiating capacity all contributed to the culmination of the IP related agreements in WTO and finally came into existence in the form of TRIPS.
The asymmetry in R&D expenses will show us how massive was the difference of R&D expenditure between developed and developing countries around the time when TRIPS was enforced by WTO member countries. Now the countries who signed TRIPS in haste are repenting in leisure by realising or yet in the myst of realisation that the objective of TRIPS was to freeze the comparative advantages. It is surprising that developing countries did not discuss the TRIPS provision at all during the Uruguay rounds of discussion years of 1986-89. Then suddenly around 1989, the negotiating teams of the developing countries were caught in psychological asymmetry when issues of IPR were inserted without allowing the developing countries to have a well-informed strategy to negotiate. The high-profile benefits of the TRIPS like transfer of technology, increased flow of FDI and incentives for domestic innovation are yet to be realised even to the level below that of promised. If yes, scholars ask where the empirical evidence is. More critically scholars refuse to agree to Econometric studies conducted to arrive at the conclusion which supports the highly boasted benefits of the TRIPS. Someone said that “Statistician is a person who tortures the data until it confesses the desired results.”
We can make out from the stronger enforcement of the IP that it is actually to slow down or refusing the technology transfer. The impacts of TRIPS can be observed on the changing nature of the Public Funded research carried out by universities and research institutes vis-à-vis that of profit oriented applied research done by private industries. Situation is changing; academic research community which is meant to disseminate the knowledge are increasingly shying away from the publishing and instead are focussing on the securing the knowledge through the patents and other forms. So, academic communities are witnessing the less and less communication of knowledge even though howsoever the number of increasing conferences are registering massive crowd of paper presenters. Crucial questions: Is IP enforcement the legitimate instrument for realising the national development goals? Do developing countries have the policy space today while countering the pressure of western countries in newly emerging scenario of TRIPS + negotiations? Why should south now have more obligations compared to already frozen comparative advantage in favour of richer world?
While answering to all these questions we should remember that global web of IP enforcement has travelled beyond TRIPS provisions and US, EU, Japan and other highly industrialised countries are using stronger IP enforcement strategies, bilateral/multilateral free trade agreements to trap the developing countries to move towards the TRIPS + negotiations. The countries which are much richer than India in terms of per capita GDP are refusing to the mighty club of the developed world to enter into negotiations about TRIPS +. So, why developing countries like India should fall in line for the negotiations of the stronger and stronger IP enforcement.
The report of the US-India Business Council entitled The Value of Incremental Innovation: Benefits for Indian Patients and Indian Businesses makes a strong plea for abolition of section 3(d) of the Indian Patents Act so that incremental innovations in the pharmaceutical sector can get patented in India. According to the report, this is beneficial to patients and also the domestic pharmaceutical industry since they are good at such incremental innovations. Government of India however, appointed a committee under the chairmanship of Dr. Mashelkar to examine whether it could be TRIPs compatible to restrict patents to New Chemical Entities. (NCEs) Since the Indian Patents Act has not restricted patents to NCEs, it does not require any amendment on the basis of the committee`s recommendations. Then this argument that patenting of all incremental innovations is beneficial to generic companies is facetious. It is likely to delay launching of generics. Further the evidence that patent protection is essential for innovation is not conclusive. Public funded research has been behind most pharmaceutical breakthroughs.
We all know that IP rights are territorial, privately exercised and remains as it is until someone infringes upon it. In a way, IP is independent law but the questions about the safety and quality of the products protected under IP rights need to be asked. Marketing strategies of companies dictate seeking extension of market exclusivity for their products through various means. Patenting becomes one such strategy and many companies seek to increase number of patents on a single product as part of this strategy, mainly to keep off competition. Even without intellectual property protection, originator companies have an advantage over the generic pharma companies as they can bring their products to the market much before the latter and that gives them strong market presence by the time others enter. Generics serve a major public health cause by introducing cheaper drugs compared to the patented ones. Removal of section 3(d) will result in ever greening and delay in the entry of generics thereby adversely affecting public health.
These days, the relation between stronger IP enforcement and Innovation is being discussed with vigour. While it is increasingly clear that IP enforcement is not the helpful catalyst for the innovation culture. Interests in IP protection change as local entrepreneur generate more and more innovation and new successful marketing strategies. In newly formed economic environment, the local brands compete with each other and with foreign market participants. Therefore these local small, medium and big firms seek ascending investments for the development of new products which require protection against uncompensated appropriation. So, increasingly IP strategy is being aligned with that of export strategy. National innovation programs in countries like Brazil, Singapore, Taiwan, Israel and elsewhere industrialised parks are increasingly being subsidised. More provisions are being made for seed financing for start-up entrepreneurs.
Financing plans for facilities of consolidated activities to achieve economies of scale are being devised to support manufacturing industries. OECD economies rely heavily on subsidisation of innovation including R&D/Innovation of military & civil aircrafts, health, pharma and export markets. So developed countries are investing in helping SMEs by subsidising their efforts of creating local brands and by providing local capital base. They are pushing for policies promoting participation of SMEs in stronger IP enforcement. Access to scientific/technical/IP information is crucial in strengthening competitiveness. In developing countries, absence of access to efficient registration system of different IP forms, disadvantages less financially able participants. One thing is for sure. The baseline of TRIPs which is push towards stronger IP enforcement is here to say. Believers of stronger TRIPs say that markets rely more on strengthening of IP system and emerging markets have potential to create innovative paradigms for expansion of profits. So, in the difficult times when R&D units and further Indian firms are being sold to the foreign MNCs, more focus should be on process innovation like Jaipur foot/Shankar Netralaya and also on informal/grassroots innovation experiments.
Access to knowledge and dissemination of knowledge is one of the most crucial issues while debating about the IP in the context of WTO negotiations. Relation between utility and knowledge, creativity-reward-more creativity is necessary to be taken into account. Usually small monopolies stimulate further discoveries and they start eating into public domain. This affects in serious degradation of knowledge assets in public domain. So, IP enforcement motivates carving out monopolies from public domain. So, is it really possible to nurture a spill over knowledge economy? IP is an expression of an attempt to control the flow of the information. Alternate ways to codify and share the uncodified knowledge have to be devised. Strong motifs behind encouraging IP are: effective use of enforcement of IP can prevent free riding of other investments, increasing use of IP makes IP move from the context of abundance to that of scarcity, markets are most effective mechanism to deal with the knowledge and central coordination of research activities is more efficient than decentralised innovation. In the book The Politics of Open Source, author Stephen Weber argues that value of information increases by use and sharing. Intellectual property exists on continuum of codification from uncodified tacit. Some of the proportion of the codified knowledge depends upon newness and degree of complexities of the technology. Code is increasingly being consolidated as raw material of information economy. The code can easily be steadily removed to turn into non/anti-rivolous new commons. This process can also contribute to create large body of codes that can be studied customised and recombined into new configurations by anyone who has access to basic infrastructure. Napster was a great example of that. IP is very easier to divide than to recombine it. Because it entails huge costs to do so. So, strategy should be preventing rise of anti-commons and visualising the possibility that new commons may begin shifting of assets away from north to south.
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