WIPO International Seminar on the
Strategic Use of Intellectual Property
for Economic and Social Development
Promoting a Balanced
IP System:
Economic Issues and
Perspectives
Rio de Janeiro
May 21 to 25, 2007
Global Economic Scenario
Population
National Income (US$)
80
1 bn
20
6.02 trln
20
5.2 bn
Developing
25.37 trln
Industrialized
80
Per Capita Incomes
$ 26,510
(20%)
$ 430
(40%)
$ 1,860
(40%)
Low Income
Middle Income
High Income
Challenges
• Sustained economic growth, creation of
wealth and expansion of prosperity
depend on creativity and innovation
• IP plays a critical role in fostering
creativity and innovation
• Challenge for WIPO >>>
To ensure that IP policies and systems are
formulated and structured in a balanced
manner so as to promote innovation
and creativity in all Member States
Strategic Goals
1. Promoting a balanced IP system and
realizing its development potential
2. Strengthening IP infrastructure, institutions
and human resources
3. Progressive development of international
IP law
4. Delivery of quality service in global IP
protection systems
5. Greater efficiency of management and
administrative support processes
Main Focus
• Developing tools for policy makers to enable
them to have a deeper understanding of the role
and impact of IP on development
• Assisting countries to take into account
flexibilities and public interest objectives
• Enhancing the understanding of the IP system
by innovators, creators, research institutions,
SMEs and creative industries
• Developing policy-oriented economic
research in order to enable
policy-makers to take evidence-based
Why
decisions in the field of IP
?
Because...
• Theories of Economic Development amenable
only to econometric modeling and analysis
• Difficult to inject IP factor into the model due to
the following reasons:
– IP has various elements
– for each element, varying parameters
– for each parameter, different standards in different
countries
• Hence propensity to simplify or link IP
with creativity/innovativeness –
emphasizing the importance of the
knowledge market
Mantra: Protecting the Market for
Knowledge Goods
• Imperative for State to intervene due to two
characteristics
– Non-rivalrousness:
• simultaneous use by multiple entities
• no bottlenecks or capacity constraints
– Non-excludability:
• use without authorization cannot be prevented
• Ensure dynamic benefits at the expense of
static costs
• Reduce uncertainty of investments vs
certainty of profits (before vs after)
• Protection promotes innovation but….
Does it catalyze the
development process ?
Perceptions vary, hence
the debate on a
WIPO Development Agenda..…..
Economic Studies, based on
scientific research and empirical
analysis are now looking into
these issues
Economic Issues
Patents :
• How different elements of the patent system
affect innovation in different sectors/countries?
• Is there any evidence of patents blocking, rather
than promoting innovation?
• What complementary policies are necessary to
ensure that patents act as an adequate
incentive to innovate?
• Is there any empirical evidence on the
impact of recent changes in patent
protection in developing countries on
innovation?
Copyrights:
• Review of economic findings on the
economics of copyright (e.g. on scope of
protection, length of protection, fair use,
collective management, exceptions and
limitations, digital rights management,
etc.).
• How to strike a balance between access
to works and incentives to create new
works?
• Analysis of empirical evidence from
different countries and policy implications
Trademarks/GIs:
• Economic rationale for protection
• Conclusions of recent economic research about
the role of trademarks/GIs in the marketplace
• Overview of economic research on use of
trademark/GIs in developing countries
Traditional Knowledge:
• The economic rationale for/against the
protection of TK
• Analysis of different approaches to the
protection of TK and the potential
economic implications
Other Strategic Issues:
• Economic analysis of the interface between IP and
competition policy
– How to balance exclusive rights granted by the IP system
and the objectives of competition policy?
– What is the experience of developed and developing
countries in the field of IP and competition policy?
– How can competition policy help to ensure that the IP
system meets its objectives ?
• Economic evidence on the impact of the IP system
on the ability of governments to meet public health
objectives
• Similarly, issues relating to
– technology transfer
– commercialization of R&D and academic research results
– economics of research, innovation and intellectual property
rights in the agriculture/biotech/software/pharma/music
industry
Imperative to examine
these issues in depth
and reach conclusions
only after analyzing
empirical evidence
an example…
Patent Protection,
Technology Licensing
and the
Tragedy of the Anti-Commons
Patenting - Benefits and Costs
• Patent protection provides safeguards
against misappropriation of proprietary
technology and opportunistic behavior
• However, ‘strong patent protection’
entails costs by potentially creating
market power in downstream product
markets
• Do patents inhibit subsequent
inventions and their
commercialization …...….
the Anti-Commons problem ?
Commons and the
Anti-Commons
• “Tragedy of the Commons”: People
overuse resources owned in common as
no incentive to conserve - overpopulation,
air pollution, species extinction
(Garrett Hardin 1968)
• Proliferation of IPRs, leads to underuse of
scarce resources, as people block each
other - thereby creating an “anticommons” (Heller and Eisenberg)*
* Can Patents Deter Innovation? The Anticommons in
Biomedical Research - Michael Heller et al, Science 280 (1998)
• Bio-medical research and innovations susceptible
– numerous right holders – licensing/transactions costs
higher than ultimate value
– heterogeneity in goals/norms/practices increases
difficulty in reaching agreement
– uncertainty over the value of rights
• Conditions ripe to create an “anti-commons”
problem - but empirical evidence lacking
• Study by Walsh, Arora, Cohen (2003) to assess
whether commercialization of biotech innovations
are hampered by multiple patent rights
• Conducted interviews with IP lawyers, scientists
and biz managers in drug/biotech firms,
universities and government research
organizations
• Questions:
– Has there been a proliferation and fragmentation
of patent rights?
– Has this lead to a failure to realize mutually
beneficial trades, as stated in the theory of “anticommons”?
– Has restricted access to upstream discoveries
impeded subsequent research?
• Conclusions:
– Pre-conditions exist for “anti-commons”
• number of patent holders per innovation has risen in recent years
and patent landscape has become more complex
• universities/research Institutions have patented aggressively
– in 3 key bio-med utility classes, univ share in total patents increased
from 8 % (early 70s) to 25 % by mid 90s
– gross licensing revenues increased – US $ 186 mn (130 univs) in
1991 to US $ 862 mn in 1999 (190 univs)
– univ technology licensing offices – 8 times increase from 1980 to
1995.. Emphasis on licensing of univ discoveries
– But consequences as hypothesized not
reported
– Though a large number of patents may be
potentially relevant to a given project, the
actual number needed to conduct a drug
development project is often substantially
smaller (adrenergic receptor; maize)
– No instance of breakdown in negotiations
over rights leading to suspension of R&D
projects (eg.,GoldenRiceTM)
– Royalty stacking did not present a threat to
on-going R&D projects
Thank you
Gracias
Obrigado