Intellectual Property Rights in the Uruguay Round: A Disaster for the South?
Author(s): Surendra J. Patel
Reviewed work(s):
Source: Economic and Political Weekly, Vol. 24, No. 18 (May 6, 1989), pp. 978-993
Published by: Economic and Political Weekly
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SPECIAL ARTICLES
Intellectual Property
Rights
Uruguay
Round
A Disaster for the South?
in
the
Surendra J Patel
Thenegotiationson intellectualpropertyrightsgoing on in GATTsince 1987profoundlyaffect the prospects
of techndlogicaltransformationof the developingcountries. Thispaper examinesthe negotiatingmandateof
the UruguayRoundand its implications;the intellectualpropertysystem,particularlythe role of patents as they
affect developmentsin the third world;the genesisof the Paris Convention and the variousinitiativestakenby
third worldcountriesto loosen the constraintsim,posedby the unbalancedand inequitableoperationof the industrialpropertyrightssystem. The implicationsof the proposalssubmittedby the developedcountriesin the
GATTare discussedagainst this background.
I
Introduction
to improve rapidly the well-being and the
quality of life of their people.
This study is devoted to exploring some
THE Uruguay Round of Negotiations on of these questions. It is necessary for this
Tfade-relatedAspectsof IntellectualProper- purpose to go back to basics. The study
ty Rights has been going on since 1987 in begins with the negotiating mandateof the
GATT.The acronymfor them, appropriately Uruguay Round and its implications. The
but perhapsunwittingly,is TRIPs.Theyhave second section is devotedto an examination
raised many questions which merit careful of the intellectual property system, particonsideration, for instance:
cularly the role of patents as it affects the
Why are these negotiations taking place developmentof third world countries. The
in GATTwhich had previouslyplayed only thirdsection takes up the ParisConvention,
a peripheralrole in this area?
the century-old international agreement
Whyabandonother,moreuniversal,more which has served as the umbrella for the
national industrial property systems. The
relevantand more competent fora such as
fourthsectiontracesthe initiativeslaunched
the United Nations, UNCTAD, and the
World Intellectual Property Organisation by third world countries over the last 25
(WIPO),wherethese issues havebeen under years to loosen the constraintsimposed by
far-reaching negotiations for the last 25 the unbalancedand inequitableoperationof
the industrialpropertysystem. Against this
years?
background, the fifth section takes up the
Why are the developed countries now so
strikinglysilent about all the commitments proposalssubmittedby the developedcounthey had solemnlymade duringthe negotia- tries in GATT and examines their implications. The final section furnishesa general
tions in the above fora?
Why have the developed countries made summary and a broad frameworkfor the
such a complete turn-aroundin their sub- future of these negotiations.
Attached to the study are five annexes
missionsto GATF?Why this GreatReversal,
which has raised grave doubts about the containingsome pertinentdocuments,which
can serve as a ready memory recall for the
credibility of their commitments?
These questions do not reflect just idle negotiators.
intellectualcuriosity,or merelyan irritating
II
academicenquiry.They affect the very prospects of accelerating the technological
Uruguay Mandate for GATT
transformationof the developingcountries.
Negotiations
They affect the access of these countries to
the treasure-houseof a rapidly expanding
The mandate for the GATTnegotiations
worldstock of technologies.They affect the on TRIPs wascarefullynegotiated.It should
answerto the questionof whetherthe future be recalledthat in the preparatorycommitwill be marked by an ever-wideningco- tee, no agreement had been reached on
operation between the developed and the negotiations on this subject. The United
developingcountries or by sharpeningcon- States and Japan insisted on its inclusion,
flicts between them.
although the European Community was
The answersto these questions affect the hesitant for a while.
very strategic bases of the future developThe developing countries, in sharp conment of the thirdworldcountries.They will trast, clearly opposed from the very begininfluence for a long time to come the ability ning any negotiations in GATT on intelof these countries to short-circuit the lectualproperty.Theyconsideredthat GATT
development process, to benefit from the had ony a marginaljurisdictionin this area.
new advancesin scienceand technology,and Even the question of trade in counterfeit
978
goods, they maintained,could be dealt with
in WIPO more appropriately.This was confirmed in the draft resolution submittedby
the Group of Ten(Argentina,Brazil, Cuba,
Egypt, India, Nicaragua, Nigeria, Peru,
Tanzaniaand Yugoslavia). It did not contain any referenceto intellectual property.
It confined itself only to traditional areas
of GATT.
The agreementon the ministerialdeclaration on the UruguayRound was difficult to
negotiate.It is importantto recallherein full
its text dealing with trade relatedaspects of
intellectualpropertyrights, includingtrade
in counterfeitgoods. The three paragraphs
on the subject are as follows:
In order to reduce the distortionsand
impedimentsto internationaltrade, and
taking into account the need to promote
effectiveandadequateprotectionof intellec
tual propertyrights, and to ensure that
measuresandproceduresto enforceintellectual property rights do not themselves
become barriersto legitimate trade, the
negotiations shall aim to clarify GAIT
provisionsand elaborateas appropriate
new
rules and disciplines.
Negotiations shall aim to develop a
multilateralframeworkof principles,rules
and disciplinesdealing with international
trade in counterfeit goods, taking into
account work already undertakenin the
GATT.
These negotiationsshall be withoutprejudice to other complementaryinitiatives
that may be takenin the WorldIntellectual
PropertyOrganisation
andelsewhereto deal
with these matters.
Thereare severalpoints which need to be
noted aboutthis agreedtext.The preambular
part of the first paragraph relates to
adequateprotectionof intellectualproperty
rights, and at the same time it is intended
to ensurethat the enforcementof such rights
does not itself raise barriersto legitimate
trade.
The balancebetweenthese two views was
found in a weak operationaldirectiveat the
end of the first paragraph.It restrictedthe
Economic and Political Weekly
May 6, 1989
negotiations merely to a clarification joL
existing GATT provisions. New rules and
disciplines which may be elaboratedin this
areawerequalifiedby the additioualphrase:
"as appropriate".
The second paragraph,on the other hand,
is relativelystraightforward.It is concerned
with development of a multilateralframework for dealing with internationaltradein
counterfeitgoods--.' subjectwhichhad been
discussed earlier in GATT.
In case there were to be any possible
misinterpretationof this highly qualified
mandate, a third paragraphwas added. It
was meant to reassurethe sceptics that the
negotiations in GATT shall not prejudice
other complementary initiatives in WIPO
and elsewhereto deal with these matters.
To ensurethat their positions wereclearly
understood, the representativesof Brazil,
Cuba, Peru, Nicaraguaand India formally
recordedtheir understandingof the above
mentioned mandate.They emphasisedthat
WIPO-as its very name clearly signifieswould continue to remain the main forum
for consideration of intellectual property
questions.
These points were reflected in the
negotiating plan adopted for TRIPs in
January1987.Therewas to be separateconsiderationof each of the aspects mentioned
in the ministerialdeclaration:for example,
the clarification and building up of GATT
provisions;the developmentof a multilateral
frameworkto deal with counterfeit goods;
and all this was to be done while respecting
fully the current and future initiatives in
WIPO and elsewhere.
Despite all these qualifications and safeguards,the developedcountriesinsistedthat
the GATTnegotiations should deal with all
trade-relatedaspectsof intellectualproperty
rights. This insistence was reflected in the
proposals submitted by the United States,
Japan, Switzerland, and the EEC.
These proposals are far-reaching in
character,as shown in Section V. They go
well beyond the marginal concern of the
GATT in the past with TRIPs.
They go well beyond the over 25-yearold
considerationof this subject in the United
Nations,UNCTADand WIPO.Theygo well
beyond the commitments embodied in the
resohutions, decisions and discussions,in
these bodies, agreedby all country groups.
They -go well beyond the entire history of
intergovernmentalunderstandingand consensus since the second world war.
They go well beyond even the basic
objectives laid down in the ministerial
declaration on the Uruguay Round. Particularlycentralin this respectare paragraphs
(iv) and (v) of Section B of the declaration,
defining the 'GeneralPrinciplesGoverning
Negotiations'. Paragraph(iv) reiteratesthe
agreementof all contractingpartiesthat the
principleof differentialand more favourable
treatmentembodiedin PartIV of the general
agreementand the decisionof November28,
1979appliedto these negotiationstoo. Even
more specific is paragraph(v) which may be
Economic and Political Weekly
ceived in a narrow framework,intellectual
quoted in full. It reads:
(v) The developedcountriesdo not expect property included mainly copyrights and
reciprocityfor commitmentmade by them related rights, and industrial property
in trade negotiationsto reduceor remove covered patents, utility models, inventors'
tariffs and other barriersto the trade of certificates, trademarks,and similar rights.
developing countries, do not expect the In the recent period, copyrights have been
developingcountries,in the courseof trade extended to include not only literary and
negotiations,to makecontributionswhich artisticworks, but also, in severalcountries,
are inconsistent with their individual
computer programmes, integrated circuits
development, financial and trade needs.
and informatics.
Developed contractingparties shall therefore
There is no point in subjecting these
not seek, neithershall less-developedcontracdefinitions
and concepts to any microscopic
ting parties be requiredto make, concessions
examination. Suffice it to say that in the
that are inconsistent with the latter'sdevelopUruguay Round, the developed countries
ment, financial and trade needs (emphasis
haveinsistedupon a comprehensivemeaning
added).
Quiteclearly,the developedcountrieswere of the term 'intellectualproperty',so as to
not to seek nor to expect the developing include industrial property and countercountries to make concessions which were feiting.
The coverage,of course, is important,for
inconsistentwith the latter's"development,
it
the subjectas well as the scope of
defines
financialand tradeneeds".And the developthe
But it is generallyagreedthat
problems.
ing countries,as sovereignnation states,will
haveto be, as always,the sole judgesof what at the heart of the intellectual property
system, broadly conceived, is the area
was in their best interests.
The GATT negotiations are meant to be covered by patents and trademarks. No
an exercisein persuasion.The historyof the wonder this is also an area which has been
prolonged.and very difficult and delicate subjected,overa fairlylong period,to detailed discussions. The studies on it run into
negotiations on the revisionof the intellecThe negotiations surrounding
tual property system, initiated by the thousands.
them
have
run
into decades.
developingcountries,teaches one unforgetThat is why we will focus upon the patent
table lesson-that the way forward is not
system as the basis for illustratingits operathrough moving backward.
the conflicts it has created,the passion
This is why the GATT negotiations on tion,
TRIPs are now in a complete deadlock on and the heat with which it has been discussed, and the ups and downs it has experiencthe very interpretation of the Uruguay
ed as countries change from pre-industrial
Mandate. They recall a famous story by
societiesto industrialeconomies.This would
Mark TWainof a cat who having once sat
on a hot roundstove,wouldnot go anywhere give us a historical perspective on a wide
nearanythingwhichis roundand black.The spectrum of problems, interests, conflicts
third world's perception of the TRIPs and changing positions of nation states. It
negotiations need not be expected to be would therebyfurnish a better background
to appreciate.the substance of the GATT
poorer than Mark TWain'scat's.
These developmentsraisetwo basic ques- negotiations. It will help us rememberthat
tions^.Whythis insistence by the developed all processeshave a past which casts a long
countriesto move the other way-to reverse shadow on the present and the future.
Let us begin with a definition of a patent.
the course of past negotiations? How will
any compromisesby developingcountrieson It is a right granted by governmentsto insuch a matterof vital concernto them affect ventors, for a fixed period, to exclude other
the future course of their sustained and persons from imitating, manufacturing,
using or selling a patentedproduct,or from
accelerateddevelopment?
We hope to clarify at least in part these utilising a patentedmatteror process. Note
issues in the pages that follow. They require the accenton 'to exclude'otherpersonsfrom
going back to the principles and practices certain acts.
This-meansthat governmentsby theirlaws
relatingto the intellectualpropertysystem,
theirimpacton developingcountriesand the and regulationsconfer a monopolistic right
efforts vigorouslypursuedby these countries on certainpersons.Any grantof a monopoly
since the adoption, on theirinitiative,by the necessarily affects a wide variety of
United Nations General Assembly of interests-for instance, the national patent
Resolution 1713 (XVI) on December 19, holder, the patent-granting country, the
foreign patent holder and his country, and
1961. That was a long time ago.
the international community.
These are the interests which have been
III
at play in the evolutionof the patentsystem.
Intellectual Property System and As the diversity of interestedparties indicates, there is no philosophical or practical
Developing Countries
basis on which one can suggestthat all these
It would perhapsbe useful to begin with interests are always identical. In fact, cona clarification of the concepts underlying flicts of interest between the monopolistic
past discussionson the revisionof the intel- rightsgrantedto privateinterestsand the imlectual property system. There has been perative of safeguarding the public or
ambiguityin the use of the terms'intellectual national interest is inherent in the patent
property' and 'industrial property'. Con- system. In its history,the patent system has
May 6, 1989
979
been buffeted by these conflicts. Its evolution has been shapedby these conflicts. The
results of achieving a balance between the
privateand public interestshave variedover
time and from country to country. That is
why the industrial property laws of one
country differ from those of another.
NINETEENTH CENTLIRY NEALY
INDUSTRIALISING COUNTRIES AND
PATENT SYSTENI
The nineteenth century provides an excellent illustration of this conflict. Intense
battles were then fought between the free
traders wthocrusaded for liberalisationof
trade and those who pleaded for the grant
of patent monopolies.'
In the Netherlands, then a newly industrialisingcountry,the parliamentrepealed in 1869the patentlaw establishedin 1809.
Another patent law could not be introduced before 1912-43 years later.
The controversyin Switzerland,another
newlyindustrialisingcountry,was vehement.
Calls for referendumon a patent law were
-rejectedfive times-in 1849, 1851,1854,and
twice in 1863. Later,referendaon the subject were defeated in 1882 and 1886. It was
only in 1887 that a referendum was
successful.
Nor werethe controversieslimitedonly to
havinga law or not havingit. Theywerealso
reflected in the very content of the patent
laws, particularlyin the subjects excluded
from patent grants. For example,chemical
productswerenot patentablein the Federal
Republic of Germany up to 1967, in the
Nordiccountriesup to 1968,and in Switzerland up to 1978. Spain is not expected to
grantsuch protectionbefore 1992.Japandid
not give this protection before 1976. Pharmaceutical substances were not patentable
in the Federal Republic of Germany and
Franceup to 1967, and in Italy up to 1979.
In Spain, they will not be patentablebefore
1992.Canada too does not grantpatents to
pharmaceuticalproductsunlessproducedby
processes or equivalent means for which
patents are desired.
The European Patent Convention has
specifically providedfor a possible reservation by a member country refrainingfor a
time from grantingpatents for medical and
food products-a reservation which was
used by Austria and Greeceon their accession to the Convention.
The third world countries (NICs of the
twentiethcentury)havefacedsimilardebates
on the usefulness of the patent system for
best serving their national interests.These
debates have formed the basis for revisions
of the industrial property laws, which in
severalcases wereintroducedby the colonial
powersduringthe nineteentficentury.India,
for example,had its patentlaw in 1859-just
two yearsafterthe GreatRebellion,and long
before any laws on subjects of vital public
concern were enacted. The patent law was
introducedin Liberia in 1864, Mauritiusin
1875, Zaire in 1886, Sri Lanka in 1892. It
980
would be difficult to suggest that these
colonial laws had anythingto do with serving the interestof these colonies. They were
simply meant to reserve markets for the
metropolitan powers. This debris of the
colonial inheritancecould only begin to be
cleared upon liberation of these countries
after second world war.
THIRD WORLD IN PATENTSYSTEM
In order to appreciatethe actual operation of the patent system, let us look at a
snap-shot of the currentscene. During the
1970s,there wereabout 3.5 million patents
in existence. Of these, no more than 6 per
cent (2,00,000) were granted by developing
countries. An overwhelming majority of
these patents-as high as 84 per cent-were
owned by foreigners,mainly by the transnational corporations of the five major
developedmarketeconomy countries.Over
95 per cent of these patents were not used
at all in productionprocessesin the developing countries.
The nationalsof developingcountriesheld
no more than one per cent (30,000 in all) of
the 3.5 million patents in the world.
The developingcountrieswerethus plainly
on the peripheryof the worldpatentsystem.
In comparison,they account for 75 per cent
of the world population, 40 per cent of
enrolmentin highereducation, 20 to 25 per
cent of world GDP, and 15 to 20 per cent
of worldindustrialoutput;but only one per
cent of the world patent stock. The patent
system is thus a most unequal international
relationship. No wonder the third world
countriesupon their independencebegan in
earnestto restructurethis highly inequitable
relationship.
MEASURESTO SAFEGUARDPUBLIC
INTERESTS
Ensuring that the granting of patent
monopolies, which always led to higher
prices,also servedthe publicinterestsof the
countrieshas alwaysremainpatent-granting
ed a subject of public concern. The patent
laws bf most countrieshavein consequence
contained various measuresfor the limitation, in the public interest, of the monopolistic privaterightsconferredby the grant
of the patent. These have included: compulsorylicqnces;licencesof right;automatic
lapse; revocation;use and expropriationby
the state;provisionsagainst failureto work
or insufficient working; limitations on the
importationof the patentedarticlesand on
failure to satisfy national marketdemand.
Moreover,other provisions were also inserted into the patent laws to protect the
publicinterest.Severalsubjectswere,for instance, excluded from patentabilityon the
grounds of national interest. The duration
of the patentsgrantedto differentcountries
was made to vary from 5 to 21 years.
The grant of patent monopolies has led
to abusesor restrictivepracticesinsertedinto
licensing agreements. These are all well
known and need not be discussed here in
detail. But they may be listed in order to
refreshmemories. They include: territorial
restrictionsfromexports;restrictionson purchasesof intermediateinputs(rawmaterials,
spareparts,capitalgoods or technicalskills)
and on the pattern of production and on
sales and distribution;paymentsfor unused
patents; package licensing; payment of
royaltiesfor an excessivelylong period;-price
fixing; excessivelyhigh prices;improperor
discriminatoryroyalties and transforming
royaltiesor fees into capital stock; limitation on use, affecting expiry of patents or
termination of agreements; limitation on
field of use; insistence on use of certain
technical staff; absence of training of
national personnel;grant-backprovisions;
limitationson nationalresearchand technological developmentand on managementby
the licensee; prohibitions on questioning
validity of patents;using foreignlanguages
and foreign laws and jurisdiction in settlement of disputes; and so on.
These practices have been considered as
abuses or are otherwise controlled by most
countries, including those developedcountries which have made proposals in the
TRIPs Group.As early as January22, 1974,
the council of OECD had recommended
action by member governments against
restrictivepracticesrelated to the abuse of
patents. The operativeparagraphsof those
recommendationsare pertinenteven today,
since they are often forgotten by the
developedcountries.They may thereforebe
reproducedin full:2
shouldbe par(1) That they [governments]
ticularlyalertto harmfuleffectson national
and internationaltrade which may result
fromabusivepracticesin whichpatenteeand
theirlicenseesmayengage,andin particular,
form the following:
(a) whennegotiatingor operatingpatent
pools or cross-licensingagreements,unjustifiablyimpo;ingterritorial,quantityor
pricerestrictionsor attemptingto dominate
process;
an industry,marketor newindustrial
(b) by meansof territorialrestrictionsin
patentlicencesaffectinginternationaltrade,
prohibitingexportsof patented
unjustifiably
productsor unjustifiablyrestrictingtradein
or exports of the patented products to
specifiedareas;
(c) by means of clausesconcerningtied
sales, obligingthe licenseeto obtaingoods
fromthe licensoror his designatedsources,
whenthe tied salesarenot justified,for instance,by technicalreasonsconcerningthe
underthe
qualityof thegoodsmanufactured
licence;
(d) by meansof grant-backclauses,unjustifiablyrequiringthe licenseeto assignor
grantbackto the licensorexclusivelyall imin workingthepatents
discovered
provements
whenthe effectof thispracticeis to reinforce
the dominantpositionof the licensoror to
stifle the licensees incentiveto invent;
(e) by means of clauses unjustifiably
one or more
limitingcompetition,preventing
partiesto the patentlicensingcontractfrom
competingwithotherpartiesto thecontract,
Economic and Political Weekly May 6, 1989
or with third persons, in other industrial
ficds not coveredby the licensedpatent;
(f) arbitrarygroupingand licensingall
patentsin a particularfield and refusingto
grantlicencesfor only some of the patents
or using other forms of packagelicensing
whenthesepracticesarecoercivein character
andwhenthe selectionof the patentsarenot
of the parties;
negotiatedforthe convenience
and
(g) contraryto national law, fixing the
prices of patentedproductsby means of
patentlicences.
to the
(2)Thattheyshouldgiveconsideration
desirabilityand feasibilityof compulsory
licensing of patents and, where possible,
relatedknow-howas a remedyto restore
competitionwheresuch patentshave been
business
misusedcontraryto theirrestrictive
practicelaws, when such a remedyis not
alreadyprovidedfor in their legislation.
to the
(3)Thattheyshouldgiveconsideration
desirability and feasibility of making
availableto the competentauthoritiesproceduresfor the registrationof international
licensingagreements,whensuchprocedures
are not already provided for in their
legislation.
Here is a formidable list of abusive or
restrictivepractices.It assumes even greater
significance since the organisation alerting
governments for action against the wide
prevalenceof such abusive practiceswhich
may have 'harmful effects on national and
international trade' was no other than the
OECD itself. All the developed market
economy countries belong to it. It is indeed
their own exclusive organisation.
It is sobering to reflect thgt the submissions of the developed countries to the
TRIPs negotiations in GATT do not even
obliquely mention as an afterthoughtthese
harmfuleffects on trade,though they themselves have activelyengaged in negotiations
on them in the context of UNCTAD'sInternational Code of Conduct on the Transfer
of Technology.They have indeed agreed on
the substantivecontent of 14articles on the
subject. But they do not now even mention
them in GATT.Instead, they wax eloquent
on soiiie obscure'trade-distortingeffects'.as
shown in Section V below.
BURDEN OF HEAVYCOSTS
The monopolisticprivilegesgrantedto the
patenteesimpose heavy cost burdenison the
patent-granting countries. They raise the
sales pricesof the patentedproducts,thereby
leadingto a forcedtransferof incomes from
the consumers to the producers. But these
direct costs are only a tip of the iceberg for
the developingcountries.The indirector hidden costs (transferpricing,abusivepractices,
limiting possibilities of development of
nationalmanufacturing)are not figmentsof
academicians' imagination. They are part
and parcel of near universal acceptance
nowadays.
These costs have not been restrictedonly
to third world countries. The evidence on
them is indisputable.It was summarisedin
Economic and Political Weekly
an article in a special issue of the journal
WorldDevelopment (August 1974).3 It is,
therefore,not necessaryto reproduceit here.
The experience of a major developed
country, however, may be cited here for
illustrativepurposes.It concernsthe case of
overchargingby Hoffman-La Roche,one of
the world's leading drug companies, in its
sales of the patentedproductsLibriumand
Valium, to the British National Health
Service.4
The example forcefully illustrates what
actually happened even to as highly
developeda countryas the UnitedKingdom.
One can only imagine how heavy the
damages must be to the developing countries, with their much weakertechnological
capabilitiesto monitor and control abusive
practices.
The British government, following the
advice of its Monopolies Commission,
orderedRocheProducts,a Britishsubsidiary
of Hoffman-La Roche AG of Basel, to cut
its selling prices for the tranquillisersby 60
to 75 per cent and to refund $ 27.5 million
for overcharging.The MonopoliesCommission found that Roche Productswas paying
the parent company $ 925 per kg for one
substance that could be bought in Italy
(wherethese productswerenot underpatent
protection) for $ 22.50 per kg, and $ 2,305
per kg for another substance which could
be procuredin Italy for $ 50 per kg.
The overchargingamounted to 41 times
the cost of alternativesupply in the former
instance, and to 46 times in the latter.
Here is a classic example of the importance of all countriesbeing diligent in their
monitoring, regulating and prohibiting by
law such trade-destroying(not just tradedistorting) abusive practices. This applies
particularly to the developing countries,
which are proverbiallyweak in theirnational
technological capacity.
The example vividly pinpoints the losers
and the gainersin the game. Who gains and
who loses is, therefore,not an idle question.
In conclusion, we would like to underline
that this is the background for the endea'ours of the NICs, now as well as in the
nineteenth century, to regulate in their
national interestthe operationof the patent
system, to institute arrangements safeguardingpublic interestso that the doctrine
of 'private gain at public cost' would not
prevail.
This is the background,these are the considerations, this is the evideniceon which
werebased severalinitiativesby third world
countries for a fundamentalrevisionof the
nationalpatentsystemand of the ParisCon
vention. These revisionshavebeen aimed.at
serving the special needs of the developing
countries. But before we examinethem, we
should complete the enquiry on the operation of the intellectual property system by
touching upon the Paris Conventionfor the
Protectionof IndustrialProperty,which has
servedto legitimise national patent systems
for over a hundred years.
May 6, 1989
IX'
Paris Convention
The Paris Convention acts as the international umbrella for the national patent
systems. Its origin merits examination.The
initial invitation for an international conference on patent rights was sent by the
Austriangovernmenton the occasion of the
UniversalExpositionheld in Viennain 1873.
But it followed from a suggestion of the
governmentof the UnitedStatesof America.
There were preparatorydiscussions in 1878
and 1880.The conventionwas finally ready
for signature in 1883.
It was signed in 1883by Belgium,France,
Great Britain, Italy, the Netherlands, Portugal, Serbia, Spain and Switzerland from
Europe;Brazil,Ecuador,Guatemalaand El
Salvador from Latin America; and Tunisia
from North Africa. The United States
acceded in 1887.
Thereare severalintriguingfeaturesabout
the fourteenoriginalsignatoriesto the Paris
Convention. Many countries, mostly the
newly-industrialisingcountries of Europe,
had seriousmisgivingsabout such a convention. They felt that it would serve the
monopolistic interest of patent holders of
the then developed countries, particularly
GreatBritain,the United Statesand France.
The organisersof the conference had sensed the danger of disagreement. It was,
therefore, imperativeto preparewell.
The UnitedStatesbroughtwith it to Paris,
aboardthe same steamship,its protectorates
-Ecuador, El Salvador and Guatemala.
Brazil too was brought in. France brought
along Tunisia.The five helped to create a
majority through block-voting. Curiously
enough, the Netherlands, Serbia and
Switzerlanddid not even have any national
patent laws at that time. But they signed.
And Ecuador,El Salvador and Guatemala
withdrewfrom the conventionin 1886, 1887
and 1895,respectively.The 1883conference,
wherethe conventionwas agreed,was so to
say a 'theatre of the absurd',to borrow a
phrase used by some outspoken opponents
of the United Nations GeneralAssembly a
centurylater. Of the 13 signatoriesin 1883,
five had little idea of what it was all about,
and threecould not evenpersuadetheirown
countries to have patent laws.
Since its establishment,the ParisConvention remained for long 'a rich man's club.
It was revisedsix times-in 1900, 1911,1925,
1934, 1958and 1967.But each revisiononly
furtherstrengthenedthe monopolisticrights
of the patent holders.
The basic asymmetryor conflict between
the interests of the patent holders,of the
technologicallyadvancedcountriesand the
public interest of the newly industrialising
countriesrunsall the way throughthe structure of the convention. Let us briefly
examine some of its substantive articles.
Its first article is devoted to defining the
scope and coverage of industrial property.
Its next one is a big jump. It guarantees
981
equal treatmentto patenteesof all countries tariat, and the InternationalBureauof the this journey may be singled out here. They
-both the richand the poor, the strongand World Intellectual Property Organisation could help light our way through the
the weak,the developedand the developing. contained in their joint study: The Role of negotiations in GATT.
Such spurious equality between the very the PatentSystemin the 7Tansferof TechnoSeveral of the critical developments are
strong and the very weak has in reality logy to Developing Countries, referredto shownas Annexesto this study.Wewill refer
perpetuated preferences tor the poverful
earlier. The full text of its final chapter, to them at appropriate places, thereby
enterprisesof the developedcountriesin the entitled 'A Frameworkfor Revision of the avoiding over-burdening the text with
markets of the weaker ones.
PatentSystemr'is shown in Annex II in view lengthy quotations.
The convention then spells out in detail of its topical relevance.Concerningthe role
(i) The journeybeganin 1961.The governhow the signatorycountrieshaveto pass new of the patent system and the Paris conven- ment of Brazil raised the question of the
laws,or adjustthe old ones theyalreadyhad, tion, the. study concluded:
effect of the patentsystemon the thirdworld
to conform to the central purpose of the
401 The high proportion of patents at the 16thsession of the GeneralAssembly
convention-to protectonly the rightsof the
grantedby developingcountriesto nationals of the United Nations. The discussions led
patent holders while being wholly silent on
of developedcountriesreflectsthe unequal to the adoption of General Assembly
economic and technologicalstrengthsof Resolution 1713(XVI) of 1961.It requested
their obligations.
developedanddevelopingcountries.Thepro- the secretary-generalof the United Nations
Its article 5 constituted a historic comvisionson compulsorylicensingandrevoca- to study the effects of patents on the
promise between the conflict of interestof
tion have, in the absenceof technological economyof underdeveloped
patent holdersand the publiC.5It dealt with
countries.(Note
capacityin the developingcountries,proved the lingering use of the word 'underthe key questions concerning the use of
largely ineffective;as remedial measures developed'.) It also called for
patent grants-whether they are actually
advice on
againstnon-use.Insteadof beingusedin pro- holding an
worked in the country which grants the
international conference to
duction,
an
overwhelming
of
majority
patentrightor not. It legitimisedthe notion
patents granted to foreigners through examinethe complexproblem.The stagewas
that imports of goods involving patents
nationallaws of developingcountrieshave still set only for further study and advice.
"shallnot entail forfeitureof the patent"on
No such conference was called. The
been used to secureimportmonopolies.
the ground of non-use. Import into the
402 Patentpracticesof developingcoun- reason lies buried in the vaults of United
countrywas thus equatedwith the use of the
tries,followinginternational
standards,have Nations history. Its disturbingdetails were
patent in the country. The article severely
legalisedthis peculiarsituationwhich has broughtto light in paragraph243 and footrestricted the granting of compulsory
cometo act as a reversesystemof preferences note 137 of the joint study of the three
licences by introducing heavy qualifying
granted to foreign patent holders in the secretariats,TheRole of the Patent System,
conditions. In consequence, century-long
marketsof developingcountries.
cited above.
legal battles have not produced even 20
It should perhaps be added here that the
(ii) The next phase began during the
favourablelegal decisions for safeguarding phrase,"this peculiarsituation"was indeed discussions in the late 1960s on the interthe public interest,exceptin Canada, where a gentle UNese for "thisperversesituation". nationaldevelopmentstrategyfor the second
the matter was more vigorously pursued.6
This is the backgroundto the concernsof United Nations development decade. Its
Thereis one point, however,which merits third world countries, as they emergedinto paragraph64 called for a reviewand revision
mentionhere.The conventioncould only be independenceafterthe second worldwar,to of internationalconventionson patents. Its
legitimisedthrougha greatcompromisebet- initiate a fundamental revision of the text is to be found in the first preambular
ween the private interest of patent holders industrialpropertysystem-both at national paragraphof Resolution 3 (I) in Annex I.
and the public interest.It had, therefore,to and internationallevels-to which we now
(iii) A major step was taken at the third
recognisethe basic freedom and flexibility turn our attention.
UNCTADheld in Santiagode Chilein 1972.
of member states to legislate according to
Its unanimousResolution39(111)invitedthe
their own perception of their national
V
secretary-generalof the United Nations, in
interests.As G H C Bodenhausen emphaco-operation with the secretary-generalof
Third World Initiatives to Revise
sised in an official study:7
UNCTADand the directorgeneralof World
Patent System
In the fieldof patents,for example,the conIntellectualPropertyOrganisation,to bring
ventionleaves the member states entirelyfree
The post-war world saw the collapse of up-to-date the 1965 United Nations report
to establishthe criteriaof patentability,to
decidewhetherpatentapplicationsshouldor imperialism.Tidal wavesof liberationmove- on the subject.8It requestedhim "to devote
shouldnot be examinedin orderto determine ments swept the colonies and dependencies. specialconsiderationin this studyto the role
before a patent is granted,whetherthese New ,independentnation states were born. of the internationalpatent systems in such
criteriahave been met, whetherthe patent They began forthwith to plan for their transfer,with a view to providing a better
shouldbe grantedto the firstinventoror to accelerated economic, social and techno- understandingof this role in the context of
the first applicantfor a patent,or whether logical transformation. They began to a future revision of the system".Note the
patentsshouldbe grantedfor productsonly, perceivethe perverseimpact of the patent movement from a study and review to a
for processesonly,or for both,andin which system.the inequityof the ParisConvention. future revisionof the system. A small step,
fields of industry and for what term They joined together to form the Group but still a new departure.
(emphasisadded).
of 77.
(iv) The study called for in.UNCTAD
The convention has a unique system imThe third world countries called for a Resorution39(III) was jointly preparedby
plicit in the provision on its revision-only
basic revision of both the national patent the three secretariats.It was published in
by complete unanimity. The veto system, systemsand the ParisConvention.They met 1975 under the title The Role of the Patent
restrictedto only five membersof the United in expertgroups. They draftedproposals as System in the Thansferof Technology to
NationsSecurityCouncil,is thus only a pale governmentrepresentatives.
They negotiated Developing Countries. It remains a classic
imitation of the practicethe Paris Conven- hard. The summit conferencesof the non- on the subject, Particularlyrelevant is its
tion had startedlong before. Even the pro- aligned and of the Group of 77 endorsed partthree,'A Frameworkfor Revisionof the
cess of withdrawingfrom the convention is these initiatives.
Patent System'.reproducedin Annex II.
both tricky and long. It would involve at
(v) In the same year, the seventh special
The processof revisionwas difficult. The
least five to six years.
issues were complex. The stakes were high. session of the United Nations General
This discussion may be summarised by The discussions were long and arduous. Assembly adopted, on September16, 1975,
citing the highly incisive conclusions of the Their history remainsto be written. When- Resolution 3362 (S-VII). Its paragraph 3
United Nations Department of Economic everit is written,the year 1975will standout reads:
and Social Affairs, the UNCTAD Secre- as its high water-mark.A few landmarksin
Internationalconventionson patents and
982
Economic and Political Weekly May 6, 1989
trade marks should be reviewed and revised
to meet, in particular, the special needs of
the developing countries, in order that,these
conventions may become more satisfactory
instruments for aiding developing countries
in the transfer and development of technology. National patent systems should,
without delay, be brought into line with the
international patent system in its revised
form.
The developed countries, by joining the
unanimousadoption of this resolution,thus
committedthemselvesto the reviewand revision of the industrial property system "to
meet, in particular,the special needs of the
developingcountries".Their submissionsin
GATT,as shown in the next section, appear
to disown these commitments.
(vi) There weremany inter-governmental
expert group meetings in UNCTAD. An
expertgroupof the developingcountriesput
forwardin 1975a carefully-worded
statement
on the role of the patent system and the
transferof technology to developingcountries. It contained concrete proposals outlining the precise directions in which the
internationalstandards,nationalpatentlaws
and the patentadministrativesystemsshould
'be revised. They will for long remain the
basic sourceof all thirdworld initiativeson
the subject (see Annex III).
The statement explained in detail the
rationaleof their initiatives for the revision
of the industrial property system. In its
paragraph 8, it set three basic objectives
which, as a minimum, must be fulfilled by
the revision of the Paris Convention. The
points that neededto be resolvedby the process were outlined in great detail in its
paragraph9.
It established the guiding principles for
the revisionof national patent systems and
their administrationin sections B and C. It
outlined, again in meticulous detail, the
main lines of the revision.These poin'tshave
guided the subsequentrevision of national
laws and regulations in the developing
countries.
They covered all the major concerns of
these countries;for instance:incorporating
new instrumentsin the system;spelling out
both the rights and the obligations of the
parties involved; sufficient flexibility in
excluding several products and processes
from patentprotectionin the light of the reof acceleratednationaleconomic
quirenments
development, public health, national
defence, and the public interest in general;
relating the scope of the patent privileges
and their durationto the importanceof the
invention and nationality of the patent applicant; spelling out the obligations of the
patent holders;strongerprovisionsfor controlling the abuses inherentin the grant of
monopolistic rights; stricter provisions to
preventimportmonopolies and to assurean
actualuse of the patentsin nationalproduction processes;and chargingregistrationfees
in relationto the commercialsignificanceof
the patented inventions and introducing a
progressivescale in maintaining them.
Economic and Political Weekly
The well-thoughtout rationale,the meticulous details and the precisedirections of
this statement stand out in sharp contrast
to the recent submissions by the developed
countriesin the GATT,describedin the next
section.
(vii) These directives of the developing
countries, modified in order to achieve a
consensus of all countries, including the
developed ones, were embodied in Resolution 3(I) of the UNCTAD Committee on
Transferof Technology-again adopted in
1975(see Annex I). The resolutionoutlined
nine considerationswhich wereto guide the
revision of the Paris Convention.
(viii) These considerations formed the
basis of the guidelinesagreedin WIPO.The
process of revisingthe Paris Conventionto
serve the special needs of the developing
countries had thus begun.
(ix) In the meantime,work on a complete
newinstrumentto promotethe transferand
development of technology in the developing countries began to be negotiated in
UNCTAD: an InternationalCode of Conduct of the Transfer of Technology. Six
sessions of an inter-governmentalgroup to
draft this code met betweenNovember1975
and July 1978. Considerableprogress was
miade.
(x) The group then called for its draft to
be takenup by the high-levelUnited Nations
Conference on the international Code of
Conducton the Transferof Technology.Between 1979 and 1985the conferencemet six
times. It agreedto practicallyall substantive
provisionsof the code, exceptfor two major
clauses: one, on the manner of treating
restrictivepractices(directlyprohibitingall
restrictionsor doing so conditionally) and
the other,on the relevantapplicablelaw and
dispute settlement. But there the negotiations were stalled. Why and by whom is a
matterof public record.Thereis no need to
go into it here.
(xi) Following UNCTAD committee
resolution 3(I), later unanimously endorsed by the UN GeneralAssembly,the actual
negotiations on the revision of the Paris
Convention were passed on to WIPO.
(xii) The preparatorywork for the revision
of the convention started in 1975 and continued until 1980when the first diplomatic
conferenceon the revisionof the ParisConvention was convened.Four sessions of this
conference had taken palce by FebruaryMarch 1984. There was again deadlock on
certain key issues-for the same reasons
which held up negotiations on the code in
UNCTAD.A series'6f consultationsamong
regional groups have since been held to try
to resolve the deadlock. There the matter
r,ests. Here again, the reasons for the
deadlockarepartof the recordand need not
be exposed here.
To conclude, this backgroundof intense
diplomatic activity in the United Nations,
in UNCTADand in WIPOto revisethe Paris
Conventionand the nationalpatentsystems
has a directbearingupon the GAIT negotia-
May 6, 1989
tions, to which we turn in the next section.
It underlinesone point. The GATTnegotiations have to take into account these past
processes. The Uruguay Round cannot be
taken as the starting point on the subject.
This is perhaps too long a statement on
the historical record. But it is intended to
serve as a memory recall of the concerns,
of the conclusions,of the recommendations,
of the initiatives, of the compromises, and
of the resultsachievedin the past. The past
is a prologue to the future. It cannot be
obliteratedby silence in some quarters.The
Annexesare commendedto those who wish
to refresh their memories of the details.
VI
Great Reversal: P'roposals osf
Developed Countrites in GATT
The preciseinterpretationof the Uruguay
Round mandate on TRIPs remains unsettled. There is indeed an impasse. The
developed countries have come out with
theirown proposalson what they wantthese
negotiations to be. Submissions have been
made by the United States,Japan,the European Community, and Switzerland. The
Nordiccountriestoo havejoined in, perhaps
a bit gingerly.
These submissionsdiffer in style, but not
in substance.The proposal of Japan is a bit
more comprehensive,mainly because it is
simply an annotatedlist. The United States'
porposals, however,contain nearly all the
elements of the others. They can be treated
as a model of the main directionsof change.
Attentionis, therefore,focusedon them here.
These proposals aim at fundamental
restructuringof the intellectual property
system. In this central objective, they run
parallel to that of the initiatives of the
developingcountries.But therethis parallel
ends. From then on, the contents of the
developed countries' proposals move completely in the opposite direction, markinga
reversalof all the commitmentsthese countries havemade in precedingnegotiationsin
UNCTAD and WIPO. Some of the main
points in these proposals are examined
below.
ORIGINOF PROPOSALS
(a) The first point that strike.sone about
these proposals is their rather unusual
origin. They are based on statements of
losses, difficulties,distortions,impediments,
obstacles as reported by the companies
and/or exportersor their associations. The
governmentshave simply reproducedthese
reports without the slightest verification.
There is no analysis of the statements, no
qualifications on the relevance or the
veracity of their contents.
(b) By any standard of comparison, the
losses reportedby companies are marginal.
When everyfiguregivenin the United States
submissionis added up, the grandsum falls
short of $ 2 billion. This was less than one983
thousandthof the GDP, and one-hundredth
of the exports,of the United States in 1986.
Wewill simplyoverlookherethe estimates
of counterfeiting reported by the International Chamber of Commerce. It has
placed them at almost 2 per cent of world
exports, or around $ 70 billion. With the
value of worldexportsamountingto $ 2,114
billion in 1986, 2 per cent of them would
come to $ 42 billion, not $ 70 billion. If the
value figure is correct, the percentageshare
in world exports would be 3.3 per cent and
not 2 per cent. Such carelessnesscannot but
raisequestionsabout the validityof the concepts, methodology and measurement
techniques employed.
(c) There is an air of unseemly haste and
inadequate preparationin the estimates of
losses.
(d) The causesof the reportedlosses could
be manifold. They could be simply a reflection of the inefficiency of the companeis
concerned. In consequence, more efficient
producers, both in other developed and
developing countries, could have made
equal, or greater,gains. The losses of one
group would then have been more than offset by gains of the others.
It could also be the case that the importers
and consumers everywheretoo would have
gained. The marginalutility of incomes of
consumersis much higherthan that of companies.The consumers'income gains would
then amount to a progressiveredistribution
of income. These gains would have made a
healthyadditionto worldwelfare.Moreover,
these groups are voracious consumers (and
importers)of all types of goods and services.
Their gains would have, therefore,led to a
rise in world demand, thereby providing a
strong stimulus to production and trade in
a saggingworldeconomy.The multipliereffects of such an expansion are well known.
They need not be laboured here.
(e) In short, reportedlosses of some companies,evenwhen the companiesare powerful and strong, provide too flimsy a basis
for governmentsto see in them an equivalence to their countries' losses. The basis
becomeseven flimsierwhen this equivalence
is extended to the world as a whole, including the developing countries. This is
tantamount to a call to the whole world to
subsidise the inefficient loss-making enterprises of the developed countries.
(f) The next observation is even more
revealing, if not altogether disturbing.
Unqualifiedpresentationby governmentsof
such estimates of losses establishes an
equivalence between the interests of these
loPing private companies and the governments themselves.We had heardin the past
statements to the effect that what is good
for the General Motors-or was it US
Steel?-is good for the United States. But
that was by a high official of a private
company. His remarkscould be dismissed.
But government submissions have to be
impeccable.
In the GATT negotiations, however,the
984
governments of developed countries have
presented the reported-but unverifiedlosses of some companies as losses for their
national economies. We now see a new
paradjgm:the losses of private companies
are losses of the developed countries. And
the losses of the developed countries are
losses for all countries,for all peoples of the
world. One would have thought again that
such equivalence was an aberrationof the
past, that the world has become more
sophisticated.
(g) That, however,does not seem to be the
case. The developed country governments,
in their submissions in GAIT, accept these
losses as real, presentthem with seriousness,
list the problems,and propose remedies.As
it turns out, these remediesare also identified by the companies. The United States'
submission, in its conclusion, merely
reproducesa list of many problems identified by US compianies.The companies have
thus played simultaneously the role of the
patients, the diagnosticians, and the prescribing physicians.
(h) Wemay paraphraseherethe main problems as identifiedby US companies,which
run parallel to those also identified by the
companiesand exportersas presentedby the
other developed countries. Five such problems havebeen identifiedby the developed
countries in their submissions in GATT.
They are:
(i) totalabsenceof anylawprotectingpatents,
trademarksand copyrights;
rangeof protectionunderwhich
(ii) %arrow
severalcategoriesof productsor processes
are not protected;
(iii) too short a durationof such protection;
(iv) misuseof compulsorylicensingprovisions,
particularlyfor patents;and
(v) inadequateand ineffectiveenforcement.
PROPOSALSAND THEIR IMPLICATIONS
FOR DEVELOPINGCOUNTRIES
There is one point which apparently,or
as far as one can judge, may not be directly
attributedto privatecompanies,thoughtheir
associations have had a hand in shaping
it-a fact we came to learn about from
previous discussions in UNCTAD and
WIPO on these subjects.
It relatesto the alleged inadequacyof the
existing international standards (the unnamed weaknesses are obviously the Paris
and Berne Conventions and UPOV) to
safeguard and monitor the protection
offered to intellectual property rights and
their total inaBilityto punish the violators.
Even the existing GATT articles do not
address themselves to these problems.
It is, therefore,proposedthat GAIT-not
WIPO-should adopt additionaldisciplines
in an agreementon protectionand enforcement of intellectualpropertyrights.The new
agreement must have a wide mouth and
sharp teeth. And national laws of all countries, including of course the developing
countries,must be broughtinto line with the
new agreement.
These injunctions are addressedto those
developing countries *which took their
national interests seriously and changed
their laws to safeguard them. These countries had even naively believed in the commitments the developed countries had
offered in negotiations in the United
Nations, UNCTAD and WIPO.
These then are the problems and their
origins. The prescriptions directly follow
fromthem.The submissionsby the developed
countrieswouldreversethese new departures
by the developingcountries, constrict their
accessto technology,lead to closureof some
of the industries recently developed, and
slow-downthe processof theirtechnological
transformation.
Let us briefly examine here the implications for the developingcountriesof the new
steps proposed by the developedcountries.
(i) The countriesthat do not havelaws on
intellectual property must adopt them
soonest.
(ii) The countries that do have such laws
must alter them to offer wider and stronger
protection to intellectual property rights.
The following drastic changes are
advocated:
(i) Abolish the provisions which exclude
certain products and processes from such
protection. Extend copyright coverage to
computer software, data bases and related
software and patent protection to pharmaceutical and chemical processes and plant
and animal productsof biotechnology and
genetic engineering(see BogeveDeclaration
in Annex IV).
This demand wholly disregardsthe considerations of national defencc, safety,
health, enlightenment, and accelerated
development which have until now guided
the adoption of such exclusions from
patentability-even in the developed countries, let alone the developing ones.
The new technological breakthroughsin
electronics, informatics and biotechnology
are skill-intensive.They are easier to copy,
to imitate. They could be masteredfor use
in production through reverseengineering.
Once the skill levelin any countryhas reached a critical mass, the opportunities for
benefitingfromthem are considerable.They
offer the developingcountries unparalleled
opportunitiesof short-circuiting
the development process, of leap-froggingover several
phasesof technologicalevolution.In a sense,
they weakenthe very foundations of maintaining patent monopolies.
The developed country proposals in
GATT reflect the fear of their companies
that the developingcountrieswill indeed exploit these opportunities.The fear has moved them to ask their governmentsto close
this window tight through extendingpatent
protection to all such new technologies.
The developing countries' interests obviously run in the other direction-to open
the window of golden opportunity still
wider.How are the developedcountries going to persuade the third world countries
Economic and Political Weekly
May 6, 1989
that higherprofits earnedby the companies
of the developedcountries through closing
this window ratherthan opening it wide are
in the real interest of the developing
countries?
On the question of exclusions, the pharmaceuticalcompaniesare the favouredones,
perhaps because these are more vocal and
influential. The consumers are too
disorganisedto be given any attention.That
is perhaps why no developed country has
even casually referredto the conclusions of
senatecommitteesand healthactivistson the
subject.
It is pertinent to cite here from the inauguraladdressof (the late) IndiraGandhi,
the then primeministerof India,to the 34th
Session of the World Health Assembly on
May 6, 1981 in Geneva. In it, she said:
My idea of a better ordered world is one in
which medical discoveries would be free of
patents and there would be no profiting from
life or death.
(ii) Extend the duration of the patents
grantedso that the patent holders of the
can enjoy
developed countries
monopolistic profits for a much longer
period.
Such a step would strengthenthe bargaining position of the monopolists, leading to
a more stringent exercise of abusive practices, an-unjustified rise in already exorbitant costs of transferof technology,the imposition of severeconstraints on the third
world's access to technology, and a closing
down of new plants recently opened, a
decline in the rate of development, an increase in social stresses arising from mass
unemploymentand a fall in living standards
of the people. Are these sufficient compensations for strengtheningthe monopolistic
powers of the already strong and rich?
(iii) The developed countries have questioned the new departures in compulsory
licensing as recently introduced by several
developing countries to accelerate their
development.They argue,for example,that
compulsory licensing provisions,especially
for patents, are misused particularly by
developing countries.
The Paris Convention'sarticle 5A limits
the freedomof countriesto providefor compulsory licences for failure to work. Some
developingcountries insist on working the
patentsin their countriesand refusethe patent holders' contention that importingthe
article is equivalent to producing it in the
importing countries. They have, therefore,
introducedstrongerprovisions on the subject: i e, licences of right, automatic lapse,
revocation,expropriationand use of patents
in the national interest.
The developed countries' proposals call
for a watering down of the provisions on
compulsory licensing, introduced by
developingcountriesin their recentrevision
of industrial property laws and practices
with a view to accelerating their technological transformation. The developing
countries had vigorously pursued the reviEconomic and Political Weekly
sion of article 5A of the Paris Convention
preciselyin order to obtain greater flexibility and legitimisationof theirnew laws.The
developed countries are now attempting in
GATT to turn the clock backward. That
would therebyset back by decades the process of industrialisationof the third world
countries. It would furtheraccentuatetheir
technological dependence. It would widen
the technologicalgap. It would bring about
their deindustrialisation. If they gain any
access to technology, it will only be to the
wrong technology, at the wrong prices, and
under the wrong terms and conditions.
No concern seems to havebeen shown by
the developedcountrieson the consequences
of such a move. They have not even expressed an awarenessof its full implications on
theirown credibility.It wouldlead to a complete abandonment-indeed a complete
reversal-of all the commitmentsthey have
made in the negotiations on UNCATD's
International Code of Conduct on the
Transferof Technologyand on WIPO'srevision of the Paris Convention.
(iv) Finally,the developedcountrieshave
called for teeth to be put into the process
of enforcementof the new patent laws and
international agreements. They are to be
of theirpractices.The punishmirror-images
ment for violations of this New International Property Order,they insist, must
be instantaneous and adequate.
Never mind if this wholly disregardsthe
fact ihat the differencesin nationl laws, the
alleged weaknesses in the current international agreementsare the cornerstonesof
bringing about a delicate balance between
sharp conflicts on promotingmonopolistic
private interests and safeguarding clearly
perceivednational interests.
This allegedweaknesswas indeedthe very
strengthof the Paris Convention. Without
it, the convention would simply not have
been born. The question of its lasting so
long would then have not even arisen.
Once this delicate balance is disturbedin
favourof privateinterests,the entireedifice
of the internationalconsensus would come
crumbling down. This recognition had
formedthe foundationof the veryestablishment of the Paris Convestion. The recognition had also formedthe basis of the earlier
commitmentsgiven by the developedcountries. All these are now reversed by 180
degrees.
Can it be seriously contended that these
developmentswill have no impacton future
north-south relations? Is it the belief that
the south will not comprehendthe full implications of this GrandReversalor the Grand
Betrayal,as some have called it? The south
may even begin questioning the very bases
of the intellectualpropertysystem and the
laws and practicesand internationalagreement which have been so laboriously built
upon them. The impassein GATTis a signal
of the storms ahead.
An important recent development on
these issues merits close attention. The
May 6, 1989
South Commission has considered the
Uruguay Round and its implications for the
third world. Its statement on the subject
devoted a special section on trade-related
intellectual property rights (see Annex V for
details). After weighing the issues, it
concluded:
74 It is now obvious that the positions taken
by some in the negotiations on TRIPs are
designed to evolve a new internationalsystem
that will intensify the pressures on the
developing countries to bring their intellectual property regime legislation in line with
the perceived interests of technology exporters, without addressing the basic
development concerns of the third world.
This unbalanced and inequitable approach
can never command the willing support of
the developing countries. Its acceptance
would severely inhibit technical change and
act as a major barrier to the development of
the third world.
General Suimmiiiarvand Franiewurk
for Future
Majorfacetsof the substance,the role,the
content and the evolutionof the intellectual
property system have been reviewedin the
preceding pages. They furnish the much
needed background to the critical issues
involved in the TRIPs negotiations underway in GATT.
These may be briefly summarisedhereto
serve as a frameworkfor the future.
1 There is now an impasse in GATT on
the interpretationof the verymandateof the
Uruguay Round. The developed countries
want all trade-relatedissues on the intellectual property system to be negotiated in
GATT.The developingcountrieshave insisted that these negotiations be limited only
to the issues within GATTcompetence-for
example, counterfeiting of goods.
2 The developed countries have placed
themselves in an embarrassing position.
They want to move.intwo mutuallyconflicting directions.On the one hand they want
the liberalisationof trade in goods, even in
services, thereby removing all tariff and
severalnon-tariffbarriersso that freercompetition among nation states could extend
the benefitsof comparativeadvantageto all.
At the same time, they want to impose and
enforcetheir mirror-imageof an intellectual
propertysystem,which constrainsand binds
the world productionand tradingsystem to
a furtherconsolidationof the alreadyhighly
privileged monopolistic interests of their
enterprises.Thus on the same platform,they
plead for freedomfor their tradersand protection for theirmanufacturers.They cannot
really free Prometheus by binding him
further-and more tightly.
3 The thirdworld countrieshave refused
to be tripped. The GATT mandate, they
maintain, is strictly for trade in counterfeit
goods. That, too, is to be confined only to
what is relevantto GATT.
985
4 The refusal of the third world is not a
suddeneruptionof obstinacyon the part of
a few countries. It has a long and painful
past.
5 The participationiof the developing
qountries in the shaping as well as in the
operationof the patentsystemhas been only
peripheral.Their patent laws were imposed
by colonial masters to reserve these new
marketsonly for the metropolitanmanufacturers.To legitimisethis reservationthe Paris
Conventionwas establishedin 1883upon the
insistence of the advanced industrial
countries.
6 Since independence, the developing
countrieshavecome to recognisehow poorly
placedthey arein the snap-shotof the world
industrial property system.
7 The worldstock of patentsgrantedruns,
to some 3.5 million. Of these, the nationals
of the thirdworld hold only 30,000-or less
than one per cent. All the others are held
by foreigners,mainly the transnationalcorporations of five major developed market
economy countries. Not even 5 per cent of
the patentsgrantedby the developingcountries are used in production processes in
these countries.
8 The system plainly operatesto protect
the interestof outsidemonopolies.Of all the
relationshipsbetweenthe developedand the
developingcountries,the patentsystemis the
most unequal and the most iniquitous. The
thirdworld'ssharein it is only one per cent.
In contrast,the thirdworld represents75 per
cent of world population, 40 per cent of
enrolment in higher education, 20-25 per
cent of world income, 20 per cent of world
exports, and 15-20 per cent of world
manufacturing.
9 Nearly all the patents granted by the
developingcountriesto foreignershavebeen,
usedto securemereimportmonopolies.The
import costs have been exorbitant. Prices
have been discriminatory.Attempts to use
the patents in furthering production have
been thwartedby weak provisions on compulsory licensing, and abusive and restrictive practices imposed upon them in
technology agreements and arrangements.
10In consequence,theirown nationallaws
have created and the internationalconventions have legitimised the highly perverse
situation under which the patent system
plainlyoperatesfor them as a reversesystem
of preference,reservingtheir own national
markets for foreigners.
11 Once this perception dawned, action
followed quickly. National laws were revised in all the major developing countries.
Several subjects and processes of critical
significance to national development were
excludedfrom patentability.Patentapplications from foreignersbegan to be rigorously examined.Inordinatelyhigh durationfor
patentrightsand licenceswas reduced.Laws
on compulsory licensing were tightened.
Foreignpatent holders were not allowed to
hide behind the patent monopoly to import
goods which could be domestically manu986
factured. Patents were revokedif they were
not used in domestic production. Abusive
practices began to be monitored and
regulated.
12 These changes set the stage for revising the ParisConvention,particularlyits article 5 whichdoes ngt permitconsideringimports as equivalentto non-use. Or to put it
simply,the conventionequatesimportswith
use. The entire system came under active
revision. Diplomatic negotiations began in
WIPO to revise the Paris Convention with
a view to making it an effective instrument
for the development of the third world.
Negotiations on establishinga wholly new
instrument,an InternationalCode of Conduct on Transferof Technology,began in
UNCTAD in response to the vigorous initiatives of the Group of 77.
13 The developedcountries too joined in
these processes.They committedthemselves
to the revisionof the Paris Conventionand
the establishmentof the UNCTAD Code to
promote the technologic&ldevelopmentof
the third world. The commitments were
takenseriouslyby all concerned.This should
not be forgotten-even by the developed
countries.
14 These initiatives call to our mind the
great Greeklegend of Prometheus.PercyB
Shelly, that romantic and unrepentent
reformer,had put it into his most passionate
lyrical drama, Prometheus Unbound. He
wroteit at the dawnof the IndustrialRevolution, in the beautifulspringof Romein 1817,
at the age of 26. Carried away by the
message, Beethovenwrote the music for it.
The two masters combined their talents to
immortalise mankind's eternal struggle to
unbind Prometheus thread by thread. The
Age of Hope was being born.
15 Then' came the crises. The world
economy slowed down. The third world's
exports fell. Foreign debts mounted.
Agriculture faltered. Economic growth in
several countries fell. Pressures on the
balance of paymentsbecame severe.Social
tensions mounted. Developing countries
became more vulnerable.
16 In the developed countries, new administrations,conservativein outlook, came
to power. The vulnerability of the third
world began to be exploited. The negotiations on the UNCTAD Code were stalled.
Those on the revisionof the Paris Convention were blocked. The Global Round was
abandoned. Commitments were forgotton.
Confrontation replaced co-operation. The
retreat had begun.
17 That is the backgroundto the impasse
on the interpretationof the mandate of the
Uruguay Round in GATT. Despite this
deadlock, the developed countries went
ahead and presented their proposals on
trade-relatedintellectual property rights.
18 These proposals mark the Great
Reversal.Instead of extendingthe scope of
exclusions,the developedcountriesaskedfor
a reduction. Instead of reducingthe duration, they wanted an extension. Instead of
opening wide the window of golden opportunity towards new technologies, they
wanted it to be closed tight. Insteadof putting more teeth into compulsory licensing,
they wanted to weaken, even abolish, it.
Insteadof prohibitingabusivepractices,they
wantedto providegrounds for perpetuating
them. Instead of expanding flexibility of
nationallawsin the thirdworld,they wanted
these laws to be carbon-copiesof their own
laws. Instead of revisingthe Paris Convention in the interestsof the developingcountries,they wanteda new agreementin GATT
promoting, protectiAgand enforcing their
interests.The king, it now appears,has taken
off his clothes.
19 This reversal is not just a modest
changeof the directionspursuedin the past.
It is a complete reversal.It is a reversalof
past commitments by the developed countries to assist in promotingthe development
of the third world. The clock is not simply
being put back. It is to be remadeto move
only backward.
20 That is the backgroundto the impasse
in GATT,to the refusal of the developing
countries to modify the mandate of the
Uruguay Round'on TRIPs, to the recent
forthrightconclusionof the South Commission that "this unbalancedand inequitable
approach can never command the willing
supportof the developingcountries" to the
commission'sclear warningthat "its acceptancewould severelyinhibittechnicalchange
and act as a major barrierto the development of the third world".
FRAMEWORKFORFUTURE
We have attemptedin this study to bring
back in memory the temper of times past,
the flavour of internationalcommitments,
the degreeof hopes of global co-operation.
They havea bearingupon the consideration
of TRIPs in the Uruguay Round.
Therewas a history before these negotiations. To omit it, to close one's eyes to it, to
distort it, to rewriteit-that is not the way
to achieve understandingamong sovereign
countries.
These countries are at differentstages of
development. Their priorities must reflect
these differences.Their policies, strategies,
laws, regulations,practicestoo will differ in
their essentialobjectivesand contents. Such
differencesexisteverywhere,evenin different
states, provinces, cantons of any country.
Unity of understandingwill have to build
on the hard bedrock of this diversity.
A viable frameworkfor the future will
haveto take into account the past concerns,
the past initiatives, the past commitments
traced in this study. The current impasse
therefore poses severe choices before the
negotiatingparties:eithera greaterglasnost
in GATT-to use the term given world-wide
currency elsewhere; or proceeding as if
nothing has changed. The former has a
positive promise. the latter could open up
a Pandora's box. Its repercussions could
Economic and Political Weekly May 6, 1989
prove very grave for the evolution of an Governing Negotiations on the Uruguay
orderly understanding among sovereign Round in GATT-all those noble words on
states which have to coexist in an increas- "developedcountriesdo not expect. . . shall
ingly interdependentworld. Wemay briefly therefore not seek, neither shall lessexplorethe implications of each approach. developedcontractingpartiesbe requiredto
make concessions that are inconsistentwith
Option of Understandingand Global
the latter'sdevelopment,financialand trade
Co-operation
needs". How hollow do they sound now!
A positive approachwill requirebuilding
The very posing of these stark questions
upon what has.been built before. That will contain their answers. They need not be
call for completingthe ongoing negotiations elaborated here.
This papermay be concludedby referring
in WIPO and UNCTAD. The successful
conclusionof the Revisionof the ParisCon- to two scholarlystudieson the historyof the
vention in WIPO and of the Technology ups and downs of nation states, no matter
Code in UNCTAD will provide an electri- how powerfulat a point in time. The studies
fying sparkto improveworldunderstanding. are: BarbaraTbckman'sThe March of FolA beginningcould be made by restatingthe ly: From Rhoyto Vietnam(London, 1984),
commitmentsand reinforcingthem by clear- and Paul Kennedy'sThe Rise and the Fall
ly perceptiblemoves by all concernedin the of the GreatPowers:Economic Changeand
respectivefora. This would go a long way. Military Conflict from 1500 to 2000 (New
towards dispelling the thick mist of mis- York, 1987). Of particularrelevancewould
understanding,of distrust-such a terrible be the messagecontainedin Kennedy'sconcorrodinginfluence on mutual confidence. cludingsection:'TheUnitedStates:The ProThe threads can then be picked up in blem of Number One in Relative Decline'
GATT.The negotiations can then proceed (p 513 ff). In a world which is becoming
increasinglymultipolar,the managementof
on what is germaneto GATTcompetenceinter-statepolitical and economic relationcounterfeiting of goods.
As the world looks towardsthe dawn of ships make a heavy demand on statesmanthe twenty-firstcentury,it could then draw ship, temperedby a generousunderstanding
inspirationand renewedhope from the twin of other nations' pressing needs.
strategic survival
facts-safeguarding
Annexure I
through progress on disarmament, and
brightening up the economic horizon
throughenlargeddevelopmentalco-operation Resolution Adopted by Committee
on Transfer of Technology of
among nations. Technologyissues will play
a key role in both.
UNCTAD
Option of Conflict and Global
Confrontation
It may well be that the good deeds may
not be done. This has happenedin the past.
The stronger may believe in asserting their
strength.
That could lead to more pressing, more
pushing, more arm-twisting,more tripping
of the weakerstates-one by one. Witness
the pressures exerted on the Republic of
Korea,Diiwanprovinceof China,Singapore,
Mexico, and several other states.
-The imposition of trade sanctions by the
United States against Brazil, announced on
July 22, 1988in the presidentialdecision on
the pharmaceuticals301 case, illustratesthe
relentlesspursuitof the negativeapproach.
Instead of trade liberalisation,there is now
trade war. Talk free trade, start trade wars.
The scene brings to mind the 1939 meeting
in the Leagueof Nations which was talking
of the harmonisation of traffic signs in
Europe on the same day on which Nazi
armies had violated all traffic signs and
crossed into Poland.
Where would be then the objective of
more liberalisationof trade, more freedom
of competition? In shambles. Wherewould
be the commitments solemnly given in all
earlier negotiations? In the dustbin of
history. These commitments include even
those embodied as recently as September
1986, in clause (v) of the GeneralPrinciples
3 I) The Role of the Industrial Property
System in the Transfer of Technology to
Developing Countries
The Committee on Transferof Technology
Affirming that the national legislation of
developing countries on inventions, where it
exists, should ensure that the granting of pro-.
perty rights by the states is accompanied by corresponding obligations on the part of the
patentee.
Believing that the adequate exploitation of
the patents granted would contribute towards
fulfilling the developmental needs stated above.
I Recommends that the process of revision
of the Paris Convention for the Protection of
IndustrialProperty,as well as of the Model Law
for developing countries on inventions, should
take full account of the responsibilities and
competences of the World Intellectual Property
Organisation and UNCTAD and should be.
guided, inter alia, by the following
considerations:
(a) The need to improve the conditions for
adaptation of technology and for development
of indigenous technology in developing countries-through, inter alia, the training of personnel and the provision of access to relevant
documentation;
(b) The need to promote an effective transfer
of technology to those countries under fair and
-reasonable terms and conditions;
(c) That the importation of the patented product is not as a general rule a substitute for the
working of the patent in the developing country granting it;
(d) That more adequate provisions are required to avoid abuses of patent rights and to
increasethe probabilityof patents being worked
in the developing country granting them;
(e) That the introduction of forms of protection of inventions other than traditional
patents (e g, inventors' certificates, industrial
development patents, and technology transfer
patents) should be examined;
(f) That the need for technical assistance to
developing countries in the field of industrial
property,and in particular for expanded access
to and utilisation of patent documentation by
developing countries, in order to facilitate the
transfer, absorption, adaptation and creation
of suitable technology, should be recognised;
(g) That an in-depth review of the provisions
on trade marks should be carried out;
(h) That there should be new and imaginative
studies of possibilities of giving preferential
treatment to all developing countries;
(i) That an ultimate aim of the ongoing process of revision should be to provide reasonable.
conditions for universal membership in the
Paris Union;
.2 Considers that technical assistance on an
increasing scale is urgently necessary and
should be provided to developing countries by
UNCTAD, the United Nations Industrial.
Development Organisationand the WorldIntellectual Property Organisation, through resources as appropriate, from budgetary provisions, extra-budgetary provisions or other
sources, within their respectivespheres of competence and in a closely co-ordinated manner,
for the development of the national capability
and infrastructure of these countries, with
regardto industrial property as a means of promoting national technological development;
3 Recommends that the secretary general of
UNCTAD continue developing the activities of
WelcomingGeneral Assembly resolution
3362 (S-VII)of September16, 1975which in
sectionI1l, paragraph3, providesthat "International conventionson patents and trade
marksshouldbe reviewedand revisedto meet,
in particular,the specialneedsof the develop-.
ing countries,in orderthat these conventions
maybecomemoresatisfactoryinstrumentsfor
aidingdevelopingcountriesin the transferand
developmentof technology.Nationalpatents
systemsshould,withoutdelay,be broughtinto line with the internationalpatentsystemin
its revisedform.
Recallingresolution2 (III)of July26, 1974of
the Inter-governmental
Groupon Tratsferof
Technologyon the roleof the patentsystemin
the transferof technologyto developingcountries,aand the agreedconclusionsand recomExmendationsof the Groupof Governmental
pertson the Role of the PatentSystemin the
Transferof Technology.b
thatpatentlegislationcanbe an
Recognising
important instrument for the economic
developmentof the developingcountries,if it
is designed to serve their public interest,
i e, theirdevelopmentneedsas definedin the
plans,policies
national,regionalor sub-regional
and priorities;and recognisingthe desirability
of strikingan equitablebalancebetweenthe UNCTADin providingits importanteontribupatent
publicinterestandtheprivateinterestsinvolved. tion on the functionof the international
Economic and Political Weekly May 6, 1989
987
system in the transfer of technology and the
main lines of its revision, related to economic,
commercial and developmental aspects, taking
into account the discussions at the meeting of
the Group of Governmental Experts on the
Role of the Patent System in the Transfer of
Technologycand discussions at the first session
of the Committee on Transfer of Technology;
4 Requeststhe secretarygeneralof UNCTAD
to convene a meeting of governmental experts
in early 1977to continue, in the light of the conclusions of the fourth session of the United
Nations Conference on Trade and Development, the examination of the economic, commercialand developmentalaspects of industrial
property in the transfer of technology to
developing countries and to make recommendations thereon;
5 Requests the secretary general of
UNCTAD, in consultation with the WorldIntellectual Property Organisation and the United
Nations Industrial Development Organisation:
(a) To study in depth the wide.rangeof issues
related to the improvement of the national
scientific and technological infrastructures of
developing countries with regard to industrial
property, taking into account the different
stages of development, and including the financial requirements;
(b) To continue studies on the creation of
national and sub-regional centres, and to support initiatives taken in that sense to facilitate
the availabilityof information in the scientifictechnical field, the transfer of technology and
personnel training, taking into account the different levels of development of the developing
countries and their co-operation and economic
integration processes;
6 Further requests the secretary general of
UNCTAD, in co-ordination with the World
Intellectual Property Organisation, to prepare
a study on the impact of trade marks, indications of source, appellations of origin and other
subjects of industrial property protection, on
the developmental process of developing
countries;
7 Invites the secretary general of UNCTAD,
in consultation with the World Intellectual Property Organisation, to undertakestudies on the
impact which new policies and legislation in the
field of industrial property and related matters
have on the developmental process of developing countries.
14th meeting
December 5, 1975
Notes: a Official Records if the Thade and
Development Board,. Fourteenth
Session (first part), Annexes, agenda
item 8, document TD/B/520, annex 1.
b TD/B/C
6/8, annex I.
c TD/B/C 6/8.
mentalexpertson the roleof the patentsystem
in the transferof technology have had an
opportunityto exchangeamongthemselvesthe
experienceof theirown countriesconcerning
the internationalpatent system and its administration.Theseexchangeshaveprovedof
greatadvantagein learningfromeach other's
experienceand workingtowardsevolvingthe
broadline alongwhichthe internationalstandardsset by the ParisConventionfor the protectionof Industrialproperty,nationalpatent
laws,andthe systemof patentadministrations
needto be revisedin orderto assistin the accelerationof the nationaldevelopment
of these
countries.
Theexpertsfromdevelopingcountriesarein
fullagreementwiththeconclusionsandrecommendationsof the groupof Governmental
expertsas containedin documentTD/B/C 6/8,
annexI. Thepreliminary
viewscontainedin the
presentdocumentaim at furtherdeveloping
certainissuesand facilitatingthe furtherwork
to be carriedout for the revisionof the industrialpropertysystem.It should be added
that these preliminaryviewsare presentedby
the experts in their personal capacity and
thereforedo not bindtheirnationalauthorities.
INTRODUCTION
of imported technologies. The weaknesses of
economic and technological structures have
placed the enterprises of developing countries
in a highly vulnerable position when negotiating contractual arrangements with more
powerful foreign corporations.
4 It must be understood that developing
countries can derive benefits from patents and
other forms of industrial property only to the
extent that technical knowledge is put to effective use in the countries granting the patents
and leads to the establishment of production
facilities called for in these countries' national
development plans and priorities.
5 In most developingcountrics the state plays
a pioneering role in the field of development.
The heavy social and economic responsibilities
assumed by the state in these countries necessitate that the privileges granted to individuals
and corporations be adequately counterbalanced by requiring them to put their technical
knowledge to the widest possible social use. In
other words, there should be a decisive shift in
favour of the recognition of public interest in
the balance of the monopoly patent rights on
the one hand and the economic and social
needs of the countries on the other.
6 Such a shift can only be achieved through
adequate revision of national legislation on industrial property,which would provideboth for
appropriateincentivesto domestic inventiveness
and effective means of ensuring the working
of patents in the country concerned. A revision
of national industrial property legislation so as
to serve the specific public interest of developing countries could also be greatly facilitated
by an appropriate revision of the international
standards on industrial property, particularly
the Paris Convention.
7 This is the broad frameworkagainst which
the main lines of revision of the Paris convention and national laws have to be considered.
The experts from developing countries, participating in the group of governmentalcxperts
on the role of the patent system in the transfer
of technology, have consideredthe broad issues
involved, and their views on the following
aspects, expressedin their personalcapacity,are
set out below. They concern:
(a) Revision of international and national
systems of intellectual property with a view to
orienting them specially towards the interests.
of developing countries;
(b) Some of the operational steps necessary
to supplement the changes in the juridical and
administrative systems.
1 The benefits of the scientific and
technologicalrevolutionhavenot beenshared
equitablyby all membersof the international
community.It has raisedthe levelof livingin
developedcountriesbut has by and largebypassedthe developingcountries.The gap betweenthe developedand developingcountries
continuesto widenin a systemof international
relationswhichwasestablishedat a timewhen
most of the developingcountriesdid not even
exist as independent states and which
perpetuatesinequality. It was against this
backgroundthat the declarationand programmeof actionon theestablishment
of a new
internationaleconomicorder,adoptedby the
GeneralAssemblyat its sixthspecialsessionin
May 1974 (resolutions3201 (S-VI)and 3202
(S-VI)),call upon all statesto take measures
aimedat eliminatingthe wideninggapbetween
the developedandthedevelopingcountriesand
acceleratingthe economicand socialadvance
of the developingcountries.
2 Theexpertsof developingcountriesbelieve
that the economicand socialprogressand the
improvement
of the well-beingof theirpeoples
industrialisacriticallydependuponaccelerated
tion, whichin turnrequiresobtainingthe right
typeof technological
inputs,at rightpricesand (A) REVISION OF INTERNATIONAL STANDARDS
underrighttermsandconditions.Theseinputs
can makemaximumcontributiontowardsthe The Paris Convention for the Protection of Industrial Property
mobilisationof all necessaryresourcesonly in
the frameworkof adequateenvironmentem8 The process of revision of the Paris Conbracingall aspects-political, financial,com- vention must fulfil, as a minimum, three basic
Annexure II
mercial,educational,scientific,technological, objectives:
etc-of relationsamong countries.
(a) The industrial property system can serve
Role zf Patent System
3 Industrialpropertysystemsand practices as a useful tool for facilitating the transfer of
in the Transfer of Technology
could,if properlydesigned,serveto contribute technology to developing countries if the interto Developing Countries:
towardsthe creationof such favourableen- national standardsare adapted to the economic,
vironment. In the developing countries, social and political conditions and national
Conclusions of Experts from
however,the privilegescreatedbythe industrial development objectives of developing countries
Developing Countriesa
propertysystemas theyexisthaveby andlarge and if they do not constrain in any way the
failedto contributeeitherto stimulateinven- flexibility of each country to adapt its laws and
PREFATORY
NoTE
tions among their own nationals or to en- practices to its own needs;
Expertsfromdevelopingcountrieswho par- couragerapidtransfer,appropriate
adaptation,
(b) The immediateand continuingtask of
in themeetingof thegroupof govern- thoroughassimilation
andwidespread
diffusion the systemshouldbe to providein the shortest
ticip.ated
988
Economic and Political Weekly
May 6, 1989
possible time the broadest possible technical
assistance to help developing countries
strengthentheir scientific and technological infrastructures and to train their specialists;
(c) The internationalstandardsshould reflect
the historicaland economic changes which have
taken place, and the new trends in national
legislation and practices of developing countries (whether members or not of the Paris
Union).
9 In order to achieve those objectives, the
process of revision of the Paris convention
should address itself to resolving the following
points:
(a) The working of patents in developing
countries is of primaryimportance for development. In no way can it be replaced by importation, nor by creation of a monopoly with
respect to such importation;
(b) To establish a balance between the rights
of the patent owners and their duties and
obligations;
(c) To prevent abuses which-are permissible
under the clauses of the existing convention;
(d) The recognition of the rights of any
member country, inter alia:
(i) To determine the forms, types and
modalities of industrialpropertyto be included
in its own national legislation;
(ii) To define which products, or groups of
products, and processesare to be excluded from
patent protection, or similar legally protective
rights;
(iii) To establish the type and form of licensing systems which it deems necessary for its
economic development (compulsory licences,
licences d'office and licences of right or any
other type decided upon);
(iv) To decide on the ground for automatic
annulation or revocation, including expropriation for state reasons, of patents or other titles
of protection;
(v) To decide what to requireof the applicant
in the way of disclosure of the inventioah,or information pertaining to any new development
or to any other aspect regarding the invention;
(vi) To demand the complete elimination of
restrictivepractices or abusive clauses in licensing agreements;
(vii) In connection with trade marks, appellations of origin and similar modalities:
(a) To establish that the appellations of
origin are the sole and intransferableproperty of the country or state where they exist
and to define the conditions for their use;
(b) To declare the revocation of trade
marks within a cohcrete and definite term
because of non-use and/or to tie them to the
treatment and incidents regarding them in
their country of origin;
(c) To include foreign trade marks in action related to control of licences and/or the
transfer of technology, when those are the
origin, or are a definite part of both and
affect, the1efore, the development or the
economy of the country involved.
(e) Concerning 'national treatment', it is indispensable to establish a system of "nonreciprocal preferential treatment" in favour of
,developinqcountries involving special flexibility
and provisions concerning the following:
(i) The level and types of fees and the scale
of progressive annuity rates;
(ii) Priorities;
Economic and Political Weekly
(iii) Duration of protection;
(iv) Promotion of national inventivecapacity
in all its aspects and encouragement and concessions to national inventors, not extensive to
foreigners;
(v) Special protection of appellation of
origin, indication of source and well known
trade marks of developing countries against
unfair competition;
(f) Requirementat national level in developing countries that all inventions which are
generated or initiated in the country be first
registered in that country, even in the event of
employees' inventions;
(g) Developed countries should supply
technical information on patents to developing countries and guaranteeits exchangeas well
as any other means of collaboration which can
improve the search for technological alternatives and the negotiating capabilities of
developing countries.
(B)
NATIONAL PATENT LEGISLATION AND
ADMINISTRATION
General Principles
10 In the process of revising the national
patent system and its administration, the
following guiding principlesshould be taken into consideration:
(a) Patents should be conceived as an instrument of natio'nal economic policy, to be used
in conjunction with other policies such as incentives to national inventiveness, transfer of
technology and foreign investment for the
realisation of national development objectives;
(b) The legal privilege embodied in the patent grant should be governed by the criteria
of public interest and national sovereignty;
(c) The basic objectives of the patent system,
at least as far as developing courntriesare concerned, should be the promotion of the scientific and technological capabilities of the patert granting country, the generation and diffusion of technical knowledge and innovations
and their incorporation into the production
process, and to facilitate access to appropriate
foreign technology under fair and reasonable
terms and conditions.
Main Lines of Revision of National Patent
Laws and Administration
might be extendedor restrictedaccordingto the
importance of the invention from the national
point of view or according to the nationality
of the inventoror innovator.As a means of promoting national inventiveness, a wider spectrum of privileges might be granted to inventions made by nationals of the granting
country;
(d) Duration of patents might be related to
the importanceof the inventionand to its social
benefit and should be flexible;
(e) Possible interest in including the following among the obligations of the patentee;
(i) To give adequate disclosure of the invention to permit a national versed in the technical
field to comprehend and put the knowledge or
innovation into practice;
(ii) To inform the national authorities of new
regarding the patented
developments
inventions;
(iii) To provide the necessary know-how to
make it possible for a third person to put into
practice the invention or innovation;
(iv) To put into use, wherever feasible, the
patented invention;
(v) To refrain from imposing restrictivepractices in licensing arrangements;
(vi) To inform the national authority on all
aspects of the actual exploitation of the
invention;
(f Appropriate remedies and means of controlling the obligations stemming from the patent grant. These remedies and means of control might, inter alia, include automatic licensing, licences of right, efficient compulsory
licence procedures, use or expropriation by the
state of the patentedinvention in cases of public
interest, revocation of the patented inventiorn
when this is considered the sole remedy for
preventing or putting an end to a particular
abuse. Attention should be given to some proceduralaspects such as the burdenof proof that
should lie on the patentee or his licensee regarding the exploitation of the invention and the
furnishing of relevant information to the national authorities.
12 Appropriate administrativearrangements
should be made to enable the consideration of
patent applications and the operation of the patent system to become a part of the economic
and industrial planning system of the country.
13 The fees for registering the patent might
be relatedto the commercial significance of the
11 The developing countries, in reconsiderpatented invention, as well as to the duration
ing their national patent laws, should take the
of the patent, and the maintenance fees should
following elements into account:
be levied on a progressive scale.
(a) Possible interest in incorporating in na14 Appropriate arrangements among the
tional legislation such industrial property titles
as, inter alia, inventors' certificates, utility cer- developing countries might be made at the
interregional, regional and sub-regional levels:
tificates, utility models, patents or certificates
of addition, inventors' certificates of addition,
(a) To assist patent offices in carrying out
utility certificates of addition, industrial
adequately their functions;
development patents: rights and obligations
(b) To establish institutional arrangements
under each of these titles may vary, according
for the training and exchange of technical
to national needs, from conventional patent
personnel;
grants;
(c) To exchange information on industrial
(b) Provisions on patentability should conproperty;
tain sufficient flexibility to exempt from paten(d) To prepare model licensing contracts;
tability various products and processes for the
(e) To set up machinery to facilitate the
manufacture of such products, in the light of
dissemination and exchange of technologies
the requirements of accelerated national
originating in the developing countries, so that
economic development, public health, national
the comparative advantages and specialisation
defenceand publicinterestin general;
offered by each sector of activity may be fully
(c) The scopeof a patentholder'sprivilege utilised.
May 6, 1989
989
ANDGUiDELINES possible concrete proposals for the establish- originandcreatingthe ParisUnion,wasagreed
ADMINISTRATION
(C)PATENTS
to in 1883.It set certainstandardsfor the proFORITSOPERATION
ment of such centres.
propertyandfortherepresa The text of these conclusions, which were cir- tectionof industrial
15 The patent administrations in most
sion of unfaircompetition.Chiefamongthem
culated to the committee on Transfer of
developing countries have remained apart from
Technology at the request of the represen- werethe following:nationaltreatmentfor nainstitutions directlyinvolved in formulating and
tionals of the countriesof the Paris Union;
tative of Ethiopia, on behalf of the Group
implementing national development objectives.
of 77, in document TD/B/C6/12, is reprodu- rightof priorityfor filingof applicationswith
If the patent system is to assist in encouraging
othercountriesof the union;independenceof
ced in accordance with the decision of the
national inventiveness and strengthening in
patentsobtainedfor the sameinventionin dif5,
December
14th
on
meeting
at
its
committee
general the technological and scientific inferentcountries;importationof articles;and
1975 (see para 155 above).
frastructureof thiecountry concerned, it must
the possibilityof remedyingnon-workingby
integrate itself with all other instrumentalities
Source:UNCTAD, Reportof the Committee compulsorylicencesand forfeitureor revocaof development. Only then would it be possion Transferof Technology;First session, tion of the patents.
ble to ensure that the operation of the patent
397 Membershipof the ParisUnion has inNovember 24-December 5, 1975; Annex III.
system answers not only to the pressing needs
creasedfrom14at the timeof its establishment
of the country concerned, but succeeds at the
to 80 in 1973. Virtually all the developed
Annexure III
same time in making effective use of the scarce
market-economy
countriesandsocialistcounskilled manpower available for development.
tries of easternEuropeare members.Among
for
A
Framework
Three:
Part
16 No such integration can be achieved
whatarenowconsidereddevelopingcountries,
Revision of the Patent System
without determiningthe precise scope of operamembershiphas risenfromthreeat the end of
tion of the administration, or determining the
the nineteenthcenturyto 44 in 1973.NeverSUMMARY
vii
GENERAL
CHAPTER
broad guidelines for its operation. Recently a
theless,62 developingcountries,includingsome
AND
CONCLUSIONS
number of developing countries have taken imof the most populousones, wereoutside the
portant new steps towards establishing such
union in 1973.
have
surveyed
chapters
preceding
The
394
operational guidelines, and the experts believ398 Since its adoption90 yearsago, the
natidnal
of
characteristics
main
the
of
some
ed that a much closer exchange of information
Paris
Conventionhasbeenrevisedsixtimes.But
of
abuses
paamong various countries would prove very and international patent systems,
the main thrustof its basic provisions(sumvaluable in assisting each country to determine tent monppolies and the impact of the patent
systems on developing countries. Some of these' marisedabovein para396)has remainedmore
its own guidelines suitable to its national
or less unchanged.239 The convention
findings may be briefly summarised here to
requirements.
recognisesthe freedomof memberstates to
serve as the context of a future revision of the
17 Great importance is attached to obtainlegislateaccordingto their nationalinterests.
system.
ing patent documentation. An adequate and
It has exercisedsuch profoundinfluenceon
sensible programme of such acquisition could
nationallegislationthat,apartfromdifferences
SUMMARY
GENERAL
(A)
be guided by four criteria:
in detail,most nationallawshaveby andlarge
(a) Existing industrial capacity;
395 Since the first patent statute enacted by incorporatedits major provisions.
and
(b) Existing and planned research
399 The participationof the developing
the City State of Venice 500 years ago, patent
development activities;
countriesin shapingas wellas in the operation
laws have now been established in 120 coun(c) Evaluation of the contribution that a
patentsystemhasremained
tries, including 84 developing countries. Many of the international
given technology can make to attain economic
of these either were based on laws and prac- minimal.Thus,for instance,of the 3.5 million
objectives of the country;
currentlyin existenceonlyaboutsix per
tices of the developed countries or were in- *patents
(d) Selecting the country from which to obherited from the period of colonial dependence cent(2,00,000)aregrantedby developingcountain the patent documents, through advice of
tries. Of these, some five-sixthsare held by
of some of these countries.
experts qualified in the International Patent
396 The Paris Convention for the Protection foreignersandonly one-sixth-or one percent
of
merit
Classification, and deciding on the
of Industrial Property, covering patents, inven- of the worldtotal-by nationalsof the developeach document for reproduction.
tors' certificates, utility models, industrial ing countries.Thesecountrieshaveplainlybeen
18 It is difficult to envisage that this prodesigns, trademarks, service marks, trade on the peripheryof the patentsystem.
maxthe
without
fulfilled
be
could
gramme
400 Of the patentsgrantedby developing
names, indications of source or appellations of
imum amount of co-operation by planners,
economists, engineers and technical personnel.
The scarce skilled manpower of developing
countries could indeed be best utilised if greater
multilateral, sub-regional co-operation among
developing countries were to be fostered on a
much larger scale than has been the case
hitherto.
(Supported by Government of India and financial institutions)
19 The experience thus gained would greatly assist in carefully screening contractual arProfessor,SeniorEconomists,TownPlanner,
Faculty Positions
rangements, in the adequate choice of alterResearchAssociates, DocumentationOfficer
the
in
and
and
technologies,
native sources
Institution.Contractual
Qualification and 'As in University/Research
preparation of negotiating positions concern-deputationterms possible.
Emoluments
ing the terms and conditions governingthe conSeniorstaff must have demonstratedcapacity to
tractual arrangements.
20 In order to overcome the lack of inforconceptualise,direct studies, interactwith policy
mation, experienceand skilled manpower commakers,prepareactionplans,policypapers,reports.
mon among most developing countries, it is of
InformalSector,Urban/HousingEconomics,
Specialisation
great importance to investigate the feasibility
Finance,TownPlanning,DataBank,Surveys.
of establishing national sub-regional, regional
Officerfamiliarwith Governmentof India
One Administrative/Accounts
or other types of multinational centres to assist
rules,Stenos and ResearchInvestigators.
the process of screening, choosing, licensing,
negotiating and financing technological inputs.
Send CVwith sampleresearchworkand 2 references(forseniorposition)
21 The experts of developing countries parwithin 15 days.
FORRESEARCH
SECTORCENTRE
INFORMAL
AND TRAINING
POLICY
INFORMATION
(INSCRIPT)
ticipating in the meeting of the Group of
Goenmental Expertson the Roleof thePatent
of Technologyurgeall
Systemin the Thansfer
international organisations dealing with
transferof technologyto presentas soon as
Director
STUDIES
SOCIETYFOR DEVELOPMENT
B-7Extn/5, SafdarjangEnclave,New Delhi110 029
Economic and Political Weekly Mav 6, 1989
Resolution 39 (III) of the third session of the
United Nations Conference on Trade and
Development, mark important steps in moving
towards the revision of the system.
411 Further significance attaches in this connection to the position being clarified at the
international level concerning the promotion
of new international and national systems of
intellectualproperty,especiallyoriented towards
the interests of developing countries; such
systems cou:ld involve new international
arrangements of substantial changes in the
existing conventions.241
412 These considera'.>ns provide the context
for the revision of the international patelit
system at both the national and the international levels.
239 Thus, for instance, Senator Joseph C L
O'Mahoney, then chairman of the United
States Senate Sub-Committee on Patents,
lTademarks and Copyrights in his foreword to the study prepared for it by
Raymond Vernon,noted with respectto the
(B) CONCLUSIONS
internationalconvention for the protection
407 The set of practices of the international
of industrial property: "Over its span of
74 years, the convention's basic framework
patent system and its specific impact on the
developing countries are closely related
has stood intact". See United States of
phenomena. It is in this context that a future
America, Senate, The International Patent
revision of the patent system will have to be
System and Foreign Policy: Study of the
considered.
Sub-Committee on Patents, Trademarks,
408 Such a consideration would therefore reand Copyrights of the Committee on the
quire a revision of the current patent laws and
Judiciary (Washington, 1957) (85th conadministrativepracticesof the developing coungress, 1st session, senate, document-No 63).
tries. The purpose of any such revisionwill have
See also footnote 189 above.
to be that of rnaking patent laws and practices
240 Adopted in General Assembly Resolution
capable of effectively complementing other
2626 (XXV) of October 24, 1970.
instrumentsof policy for national development. 241 In its replies to questions put by members
Of particular relevance in this connection are,
of the committee on Negotiations with
among others, the following aspects: treatment
Intergovernmental Agencies of the
of nationals and foreigners; independence of
economic and social council of the United
patents; rights conferred by a patent; policies
Nations, the internationalbureauof WIPO
concerning subjects of patentability; duration
defined in September 1973 its attitude as
of patent grants; adequate and effective profollows:
visions to prevent and correct the abuses
In view of the requirement of unanimiresulting from the exercise of the rights conty for the revision of most existing convenferred by the patent; using patent fees as a
tions, it would probably be more practical
flexible instrument of patent policy; introducto concentrate on new international instrution of inventors'certificates,utility models and
ments which could be better geared to the
other relevant means for promoting national
solution of some problems of transfer of
scientific and technological capabilities.
technology, restrictive business practices,
469 The issues involved in a future revision
etc. However, if revision of existing conof the international patent system are complex
ventions would appear more desirable,and
and therefore need to be considered very
feasible, such revision, even if substantial,
carefully.It is importantto ensure that the main
would be possible.
lines of such a revision are pursued without
See WIPO, 'Relations between the United
creating a great deal of misunderstanding,conNations and WIPO: Report by the
fusion, uncertaintyand possible major conflicts
director-general'. AB/IV/12, annex VII,
of interpretation of national laws and interpara 43. The report added:
national standards-the very conditions which
The recent revision at Paris in 1971 of
are highly prejudicialto an orderly acceleration
the Berne Convention for the Protection
of the transfer of technology from developed
of Literary and Artistic Works offers an
to developing countries.
example: the Berne Convention was then
410 The new departures in national patent
revised by adding to it, as an integral part
practices as well as recent international disand not as an option, preferential provicussions of the patent system are beginning to
sions, on a non-reciprocal basis, in favour
exercise an influence on clarifying the issues
of developing countries for the purpoce of
involved in the revision of the patent system,
translationand reproductioriof works prothe general direction of the necessary changes
tected by copyright (ibia, para 44).
and the instrumentalities through which such
a revision could be brought about. The direc- Source United Nations, UNCTAD and WIPO,
The Role of the Patent System in the
tives in paragraphs 37 and 64 of the InterTransferof Technology to Developing
cesses from patentability;a limitationof the national Development Strategy for the Second
Countries (United Nations, New York
durationof patentgrantfor specificproducts United Nations Development Decade2 and
1975).
agreementreflectedin
or processes;in the balancebetweenmonopoly the inter-governmental
some
countries, about 84 per cent-or
1,75,000-are owned by foreigners. Most of
them are held by large corporations of five
developed market-economy countries (the
United States of America, the FederalRepublic
of Germany,the United Kingdom, Switzerland
and France). About 90 to 95 per cent of the
patents granted by developing countries to
foreignersare not used at all in production processes in these countries.
401 The high proportion of patents granted
by developing countries to nationals of
developed countries reflects the unequal
economic and technological strengths of
developed and developing countries. The provisions on compulsory licensing and revocation
have, in the absence of technological capacity
in the developing countries, proved largely ineffective as remedial measures against non-use.
Instead of being used in production, an overwhelming majority of patents granted to
foreigners through national laws of developing
countries have been used to secure import
monopolies.
402 Patent practices of developing countries,
following international standards, have legalised this peculiar situation which has come to
act as a reverse system of preferences granted
to foreign patent holders in the markets of
developing countries.
403 The small number of foreign patents
which are actually used in production processes
in developing countries representsa transfer of
technology. Even in these cases, however, the
agreements, entered into by developing countries, concerning use of patents through foreign
investmentsor licensing arrangementsfrequently contain not only high royalty payments and
charges for technical services raising the direct
costs of obtaining the technology, but also
restrictive practices and in some instances
abuses of patent monopolies, either explicitly
embodied in the contractual agreements or
implicitly followed by subsidiariesand affiliates
of transnational corporations, which impose
heavy indirect or 'hidden' costs through overcharging for imported inputs. The foreign
exchange burden of these costs-much larger
than direct costs-applies to all developing
countries regardless of whether they have
national patent laws, or whether they are
members of the Paris Union.
40)4 -This is the background for concerns
recently expressed, particularly in developing
countries, about the actual impact of the patent
system. Some of these concerns have been
reflected in recent new patent legislation by a
few developing countries (for instance, Algeria,
Brazil, Colombia, India, Iraq, Israel, Nigeria,
Peru and the Sudan). Some developed countries (Australia, Canada and socialist countries
of Eastern Europe), whose experience in important respects was not altogether different
from that of the developing countries, have also
carried out changes in their national patent
legislation.
405 These changes include the following
aspects: introduction of inventors' certificates
granted to applicants of any nationality as in
socialist countries of Eastern Europe or in
Algeria; exclusion of some products or pro-
Economic and Political Weekly
rights of patent holders and general public interest, a shift in favour of greater recognition
of public interest; strengthening of disclosure
requirements; stricter provisions for compulsory licensing and revocationas remediesfor
non-use; strong provisions against abuses in
patent licensing agreements.
406 The direction of these changes has been
a shift from primary concern with the protection of private interests of the patent holder
(mostly a foreigner in the case of developing
countries) towards safeguarding the general
public interestand economic needs of the country concerned. Some of the changes are also
intended to introduce somewhat greater administrative flexibility in the operation of the
system. These changes indicate a forwardmovement in making the consideration of the interests of economic auidsocial advance of the
developing countries the determinant of the
efficiency of the operation of the patent system.
May 6, 1989
991
-
Annexure IV
The Bogeve Declaration
-
TOWARDS A PEOPLE-ORIENTED
BIOTECHNOLOGY
-
Twenty-eightparticipants from 19 countries
met at La Solcillette,Bogwe, France,March 7-12
for the 1987 Dag Hammarskjold Seminar on
'The Socio-economic Impact of New Biotechnologies on Basic Health and Agriculture
in the Third World' The seminar was organised
and sponsored by the Dag Hammarskjold
Foundation, Uppsala, Sweden, and the Rural
Advancement Fund jnternational (RAFI)
PittsborQ, USA, anidBrandon, Canada, in cooperation with the International Organisation
of Consumers Unions (IOCU), Penang,
Malaysia, the International Coalition for
Development Action (ICDA), Brussels,
Belgium, and the United Nations NonGovernmental Liaison Service (NGLS) in
Geneva.
-
We fully recognise the potential of biotechnology to improve the quality of life of
humanity. But it is important to emphasise the
risks and hazards associated with biotechnology, including serious and possibly
irreversible health, safety, environmental and
socio-economic consequences, as well as the use
of such technology in biological warfare.
fn agriculture, for instance, while biotechnology may promise to increaseproduction
and reduce costs, it is more likely to accentuate
inequalities in the farm population, aggravate
the porblem of genetic erosion and uniformity,
undermine life-support systems, increase the
vulnerability and dependence of.farmers and
further concentrate the power of transnational
agribusiness.
In health, for instance, biotechnology promises more effective diagnostic tools and new
ways of preventing and curing diseases.
However, the pharmaceutical industry is more
likely to focus on the most profitable commercial opportunities and divert attention from
basic health requirements.
In view of the above, we make the following
recommendations:
that we commit ourselves to taking action
in this field with the relevant UN bodies
including FAO, GATT, ILO, UNCTAD,
UNEP, UNIDO, WHO and WIPO;
that we agree to carry our concerns back
to the networks with whom we are engaged,
such as Health Action International (HAI),
International Baby Food Action Network
(IBFAN), Pesticide Action Network (PAN)
and Seeds Action Network (SAN) in order
to facilitate co-operation;
that we seek to promote appropriate
technologies that are socially just and
ecologically
sustainable,
including
regenerative agriculture, alternative crop
protection strategies, preventive medicine,
recycling of resources and wastes, etc.
AT THE NATIONAL LEVEL
-
We, the seminar participants, met in Bogeve,
France, to discuss the impact of new biotechnologies on health and agriculture in the
third world, where the vast majority of the
world's people live. In discussing the nature of
the new biotechnologies, and their significance
for humanity, we recognise that:
Biotechnology is a global issue. It cannot be
-assignedsuch attributes as positive, negative or
neutral. Like any other technology, it is
inextricably linked to the society in which it is
created and used, and will be as socially just
or unjust as its milieu. Therefore, we conclude
that in today's world this most powerful new
technology is more likely to serve the interests
of the rich and powerful than the needs of the
poor and powerless.
that we monitor industry activities in this
field:
-
-
-
that a dialogue be established to determine
the real needs of society and the main
requirements for a national biotechnology
strategy based on these needs;
that the socio-economic and environmental
implications of such a strategy be fully
considered;
that the regulatoryrequirementsfor the safe
testing and introduction of the technology
be established and stringently enforced;
that the control over the technology be
assigned to ihe public sector and that the
monopoliflkion of the technology by
private interests be resisted.
AT THE INTERNATIONAL LEVEL
-
that, as at the national level, a wider-ranging
international discussion of the impact of
biotechnologies be encouraged and begun
as soon as possible, noting particularly the
initiatives begun in UNIDO/ICGEB (The
International Centre for Genetic Engineering and Biotechnology), UNCSTD/ATAS
(The Advance Technology Alert System)
and other international bodies;
-that third world governmentstake measures
to develop appropriatebiotechnologies and
further explore the opportunities for southsouth co-operation in all aspects of the
development and use of biotechnology, in
particular with regard to the utilisation of
genetic raw materials;
-that
the evolution of research and development of biotechnology be closely monitored
so that the interests and rights of the third
world are kept foremost in institutions
working on these issues;
-that
changes in existing intellectualproperty
rights discussed in WIPO, which deny the
rights. of the third world, be closely
monitored and that a major revision of the
Paris Convention be encouraged in order
to safeguardthe interestsof the third world.
In conclusion we wish to reaffirm that a
rational biotechnology policy must be geared
to meet the real needs of the majority of the
world's people and the creation of more
equitable and self-reliant societies while
working in harmony with the environment.
Participants (names of countries in the following list are given for identification purposes
only): Martin Abraham, IOCU (Malaysia);
Karim Ahmed, Natural Resources Defence
Council (USA): Annclies Allain, IOCU/
IBFAN (Malaysia); Erna Bennett (Italy);
Pierre Beniot Joly, SOLAGRAL (France);
Praful Bidwai (India);Tim Brodhead(Canada);
Anwar Fazal, IOCU (Malaysia); Cary Fowler,
RAFI (USA); Daniel J Goldstein (USA);
Susantha Goonatilake (Sri Lanka); Kwaku
Haligah, PAFATU <lbgo); Henk Hobbelink,
ICDA (Spain); Colosabus Juma (Korea);
Martin Kenney (USA); Eva Lachkovics,
RAFI/HZ (Austria); Thierry Lemaresquier,'
NGLS (Switzerland). JiramornLimnnont.
INFANTMORTALITY
IN INDIA
Differentials and Determinants
ANRUDHK JAINand PRAVINVISARIA
(editors)
'A comprehensive review of infant mortality as an indicator of the level of socioeconomic development in India ... The inter-disciplinary
dialogue between-social scientists and health professionals initiated in this book will be of lasting value.'
-Social Action Book Review Supplement
'Here is a volume which for the first time presents an analytical study of the causes
of infant mortalityand their interrelationshipon which health policies can be based.'
-Economic and Political Weekly
398 pages/220
x 140 mm/Rs 225 (tioth)/1988
AT THE CITIZEN LEVEL
-
that we accepta majorrolein the developmentof publicdiscussionandpolicyrelated
to biotechnology;
992
SAGE PUBLICATIONSINDIAPRIVATELIMITEDQ
Post Box 4215. New Delhi 1.10048
Economic and Political Weekly May 6. 1989
The Drug Study Group (Thailand); Jose
Lutzenberger,TecnologiaConvivial (Brazil);Pat
Mooney, RAFI (Canada); Olle Nordberg, DHF
(Sweden); SurendraPatel (Switzerland);Daniel
Querol (Peru); Rene Salazar, SIBAT (The
Philippines),Pilar de Sevilla, Fundacion Natura
(Ecuador); Hope Shand, RAFI (USA); Mira
Shiva, VHAI (India); VandanaShiva, Research
Foundation for Scienct Technology and
Natural Resource Policy (India).
For more information, contact: International
Organisation of Consumers Union (IOCU),
Regional Office for Asia and the Pacific,
P 0 Box 1045, 10830 Penang, Malaysia (Attention: Dr Martin Abraham) or Rural Advancement Fund International(RAFI), P 0 Box 1029,
Pittsboro, NC 27312, USA (Attention:
Ms Hope Shand).
March 12, 1987
Annexure V
South Commission on the
Uruguay Round
(Mexico City, August 8, 1988)
TRADE-RELATED
INTELLECTUAL
PROPERTY RIGHTS
69 Technical progress is a major influence
on the competitiveness of an ever expanding
list of economic activities. It is therefore an
important determinant of the emerging international division of labour.
70 The sharp acceleration in the pace of
technical progressin areas such as information,
communication and biotechnologies has provided technology leaders with a fresh impetus
to press for a major revision and expansion of
international agreements covering copyrights
(so as to include computer software, data bases
and related functional, informatics works),
patents protection (to include new processes
and products of biotechnology) and related
aspects of intellectualpropertyright protection.
It is argued that many new technological innovations (particularly computer software and
new plant varieties) lend themselves to replication more readily than many other major
technological innovations. In such cases, the
monopoly income of the innovators is easily
eroded. Therefore they require more stringent
institutional protection if the privileged position of technology leaders is to be preserved.
71 Intellectual property rights and their
internationalprotection have traditionally been
discussedin the frameworkof WIPO. However,
technology leaders have now so high a stake in
this matter that they have thought it fit to
launch a GATT-based initiative to secure a
tighter and expanded international system of
enforcementof intellectual propertyrights. The
objectiveclearly is to evolve a system that would
put effective pressure on developing countries
to restructure their national legislation on
intellectualpropertyrights to accommodate the
needs and interests of technology leaders,
notably through the expansion of the scope of
the intellectual property rights system, the extension of the lifetime of the granted privileges,
the expansion of the geographical area where
the granted privileges can be exercised and the
relaxing of restrictions on the use of granted
rights. If successful, this attempt will have
Economic and Political Weekly
edited by Surendra J Patel (Pergamon Press,
Oxford), Vol 2, No 9, September 1974. See
in particular the article by Peter O'Brien,
'Developing Countries and the. Patent
System: An Economic Appraisal', pp 27-36.
4 Ibid, p 35.
5 E Penrose, The Economics of the International Patent System (Baltimore, Johns
Hopkins Press, 1951), reprinted by Greenwood Press, Conn, 1973. In her outstanding
study, Penrose concluded:
These provisions have had a turbulent
history because they touch directly on the
conflict between the interest of the
national economy as a whole and the
interest of the individual patentee in
obtaining the maximum return from his
patent (p 78).
The list of studies bearing on the subject of
patents is a very long one. The following may
be cited as selected references.
F L Vaughan, The United States Patent
System (New York, 1925); A Plant, 'The
Economic Theory Concerning Patents for Inventions' in Economica (London), New
Series, Vol I, Nos 1-4; R Vernon, The International Patent Systems and Foreign Policy
and F Machlup, An Economic Review of the
Patent System, Studies No 5 and No 15 of
the United States Senate Sub-Committee on
Patents, Trademarks and Copyrights
(Washington DC, United States Government
Printing Office, 1957 and 1958 respectively);
various issues of The Patent, Tademark and
Copyright Journal of Research and Education (IDEA), published by the Patent,
Thademarkand Copyright Foundation of the
George Washington University (Washington
DC), Vol 1 (June 1957) to Vol 15 (1971j;
Economic Council of Canada, Report on
Intellectual and IndustrialProperty (Ottawa,
January 1971);United Kingdom, The British
Patent System and Patent Law, Cmnd 4407
(London, H M Stationery Office, July 1970);
0 J Firestone, Economic Implications of
Patents, Social Science Series No 1 (University of Ottawa Press, 192); CONICYT,
Patentes de Invencion: estudio estadistico
preliminar y proposiciones de trabajo,
Departmento de Estudios, Direccion de
Notes
1971
Planificacion,
Santiago-Chile,
(mimeographed); J M Katz, Patentes, corrrhis paper has been prepared at the request
poraciones multinacionales y tecnologia un
of the Commonwealth Secretariat. The views
examen critico de la legislacion internacional
author.]
the
of
those
expressed are
Desarrollo Economico: Revista de Ciencias
Sociales (Buenos Aires), Vol 12, No 45
1 For systematic treatment of the contents of
(April-June 1971), p 195; C V Vaitsos,
this and the next two sections, see UNCTAD,
'Patents Revisited: Their Function in
The Role of the Patent System in the Transfer
Developing Countries' in The Journal of
of Technology to Developing Countries
Development Studies, October 1972, No 1,
(United Nations, New York, 1975); a study
pp 71-96;and C T T1ylorand Z A Silberston,
jointly prepared by the United Nations
The Economic Impact of the Patent System:
Department of Economic and Social Affairs,
A Study of the British Experiment (Camthe UNCTAD Secretariat and the Interbridge University Press, 1973).
national Bureau of the World Intellectual
Property Organisation; particularlychapters 6 For details, see Table 13 on p 50 of UNCTAD,
The Role of the Patent System, op cit.
III to VII.
For a treatment of trademarks, see 7 G H C Bodenhausen, Guide to the Application of the Paris Convention for the ProtecUNCTAD, The Role of Trademarks in
tion of Industrial Property (Geneva: BIRPI,
Developing Countries (United Nations, New
1968, pp 15-16).
York, 1979).
2 Role of the Patent System, op cit, pp 28-29. 8 United Nations, The Role of Patents in the
Transferof Technologyto Developing Coun3 For details on the cost burdens borne by the
tries (United Nations, New York, 1965, Sales
developing countries, see the Special Issue on
No 65 II, B 1).
Patents of the journal WorldDevelopment,
significant adverse effects on the pace of
generation, absorption, adaptation and
assimilation of technical change in the developing countries.
72 Promotion of technical change and of an
environment conducive to inventiveness is no
doubt of interest to the world community as
a whole. However, diffusion of new technologies to the developing countries with a view
ot accelerating the tempo of their development
is an equally important international concern.
Developing countries need active assistance to
catch up with the rest of the world. Their
technological transformation is a key determinant of their development prospects. In this
context, any new international regime for the
protection of intellectualpropertyrights should
be supportive of the urgent need of developing countries to leap-frog technologically.
Development of their domestic technological
capacities is of critical importance in this
respect.
73 The promotion of domestic technological
capacities in the developing countries and providing them with adequate access to the needed
international technologies at affordable costs
should therefore form an integral component
of any balanced and equitable international
systems for the protection of intellectual property rights. The control of restrictivepractices
by transnational corporations and adoption of
positive international measures to facilitate
transfer of technology to the third world countries should figure prominently in the design
of any new system.
74 It is now obvious that the positions taken
by some in the negotiations on TRIPs are
designed to evolve a new international system
that will intensify the pressureson the developing countries to bring their intellectualproperty
regime legislation in line with the perceived interests of technology exporters, without addressing the basic development concerns of the
third world. This unbalanced and inequitable
approach can never command the willing support of the developing countries. Its acceptance
would severelyinhibit technical change and act
as a major barrier to the development of the
third world.
May 6, 1989
993