INDIA

Item 12: Proposal for Establishing a Development Agenda for WIPO

Statement by Debabrata SAHA, Deputy Permanent Representative of India

October 1, 2004

Let me start on a positive note by asking: with all the damage that
TRIPS has wrought on developing countries could it possibly have a
silver lining? Maybe - if we want to be generous. TRIPS, one might
argue, did bring intellectual property to the forefront of consciousness
of people everywhere, and, over time made them aware of the dangers
inherent in a protective regime that takes little account of either
public policy, or the state of development of a member country.

When India won independence in 1947 changes were considered in our IP
laws to reflect the social and economic needs of the country. After
lengthy debate, the patent laws were finally revised through the Patent
Act of 1970. The new law did not recognize patenting of substances that
result from chemical reactions, and they did not allow product patent
protection for drugs. Only process patents were allowed for
pharmaceutical and agro-chemicals. During the 1970's and 80', India's
pharmaceutical industry grew rapidly as it focused on the manufacture of
generic drugs, and on learning from products that had been developed
elsewhere.

As developing countries move to fulfill their obligations under TRIPS to
provide product patent protection for pharmaceuticals and agricultural
chemicals from January next year our drug and biotechnology industries
will be faced with a major challenge. Given the skills and ingenuity
that they have displayed so far, I believe they will succeed in
overcoming that challenge.

Developing countries are often quite well endowed in scientific skills.
But they need the same flexibilities that today's developed countries
had when they themselves were at a comparable stage of development. That
is why any global IP regime needs to be flexible. This is where WIPO, as
a specialized UN agency, can make a major impact - by truly incorporating
the development dimension into its mission - in letter and in spirit, so
that is appropriately reflected in all its instruments.

All members of WIPO need recognize that higher and higher levels of IP
protection, inherent in any harmonization exercise that takes no account
of the circumstances of each country, are extremely detrimental to
developing countries. Intellectual property rights have to be viewed not
as a self contained and distinct domain, but rather as an effective
policy instrument for wide ranging socio-economic and technological
development. The primary objective of this instrument is to maximize
public welfare. The national policy space of each country must be
respected, especially when developing countries are asked to assume
international obligations. Even the most advanced developed countries,
with their complex laws, have to grapple with the anti-competitive
practices linked to patents. The absence of any comparable legal regime
in developing countries means that these countries are required to grant
monopoly rights to IP holders, without any meaningful or credible
instruments to regulate the exercise of these rights.

Given the huge disparities existing across the world it is open to
question whether IP harmonization benefits developing countries. The
developed countries to pay lip service to 'development' in the context
of Intellectual Property protection, but they do so rather
self-servingly. The term 'development' as used by these countries,
including in WIPO, means quite the opposite of what developing countries
understand when they refer to the 'development dimension'. If you share
the perspective of the developed countries, 'development' means
increasing a developing country's capacity to provide protection to the
overwhelmingly developed country owners of IP rights!

A WIPO Development agenda would, obviously need to take into account any
possible negative impact on the users of IP, on consumers at large, or
on public policy in general, not just the promotion of the interest of
Intellectual Property owners. It is vital to inject this balance and
equity into the various WIPO bodies.

In a developed country, where the monopoly profits of the domestic IP
rights holders are recycled through the economy, if we set aside the
question of fairness to consumers who have often to pay exorbitant
monopoly prices for many patented products, including those for treating
life threatening diseases, at least some benefit is derived by the
public at large. For example, jobs might be created by the investments
made possible by the monopoly profits of IP holders. Taxes on these
profits contribute to the funding of transfer payments and social
welfare schemes. Even so, there is a continuing debate on the equity and
fairness of such protection, with some even questioning its claimed
social benefits. Indeed, even in the hypothetical case where IP rights
are limited to only domestic holders, whether the cost-benefit calculus
favors strong protection is still an open question.

Such secondary benefits, however indirect, do not flow across national
boundaries. Given the huge asymmetry between developed countries and
developing countries, the total absence of any mandatory cross-border
resource transfers or welfare payments, and the absence of any
significant domestic recycling of the monopoly profits of foreign IP
rights holders, the benefits are all on one side- in the developed
countries- and the costs on the other- the developing countries. The
inescapable conclusion is: Harmonization of IP laws across countries
with asymmetric distribution of IP assets is intended to serve the
interest of rent seekers, who are predominantly in developed countries,
rather than that of the public in developing countries.

Not surprisingly, developed countries have always shied away from any
discussion that invokes the primary rationale for Intellectual Property
protection. They would rather not be reminded that IP protection was
meant, first and foremost, to promote societal development by
encouraging technological innovation. The legal monopoly granted to IP
owners is only incidental - a consequence of the need to provide an
incentive for innovation. But such incentive needs to be carefully
calibrated by each country, in the light of its own circumstances,
taking into account the overall costs and benefits of such protection.
Policy flexibility is a sine qua non if societies are to ensure that the
intended beneficiary - the public in each country - is not worse off as a
result of such protection.

For developing countries to benefit from providing IP protection to
western rights holders there has to be some obligation on the part of
developed countries to transfer and disseminate technologies to
developing countries. Absent an obligation on technology transfer,
asymmetric IP rent flows would become a permanent feature, and the
benefits of IP protection would forever elude consumers in developing
countries.

Technology transfer is an issue that western countries balk at, even
though a 'best endeavor' obligation exists in TRIPS. The self-serving
response usually is that stronger IP protection, of and in itself, would
ensure technology transfer! Such a response is really not surprising.
TRIPS, as we all recognize, is a tribute to the logic of power, not of
economics, and most certainly not of fairness. It was sold on a false
prospectus, to preserve the monopoly benefits accruing to the patent
owners-nearly all of whom are based in the developed world-often at the
expense of public policy in developing countries. A WIPO Development
agenda would help steer the organization away from a similar devious
course.

While the benefits of strong IP protection for developing countries are
a matter of debate - and nearly always in the distant future - such
protection invariably entails substantial real and immediate costs for
these countries. In formulating its IP policy, therefore, each country
needs to have sufficient flexibility so that the cost of IP protection
does not outweigh the benefits. No longer are developing countries
willing to accept without question that a harmonized global patent
system benefits all countries, or that it is needed to nurture
innovativeness everywhere.

We fully support the objective for the proposal submitted by Argentina
and Brazil. We believe the proposal will contribute towards integrating
the development dimension into all areas of WIPO's work and activities.
We would like to see these proposals concretely translated to address
the concerns of the developing countries, including by the establishment
of a Working Group on the Development Agenda.