Monday, April 28, 2008

In Defence of Patents - Tim Wilson, Times of India, 28th April, 2008

Intellectual Property (IP) has always been a niche public policy areaunderstood best by policy wonks and lawyers. Unless there is a majorcontroversy, IP tends to escape public consciousness. But that is changing.Over the past few years cam­paigns to undermine IP have increased and arenow reaching a fever pitch.

IP is essential because it provides the property rights needed for researchand development to attract investment with the prospect of a long-termdividend. Under­mining IP is equivalent to the traditional socialist ethos-divvy the spoils of today's research and development, rather than focusingon expanding it. And a lot is at stake-­according to the most recent figuresfrom the United Nations, the Indian patent registry receives more than90,000 applica­tions for patentable inven­tions each year. In spite of thissignificant contri­bution, there has been a global campaign to undermine IPrights by a group of anti-market activists, self-interested politicians,vested interests, and more recently, the infiltrated World HealthOrganisation (WHO).

Innovative medicines have been one of the big targets. These activists haveargued that IP rights increase the cost of medicines for the world's poor.Yet they ignore that one of the biggest contributors to increasing costs isactually government imposed taxes and tariffs that raise the price oflife-saving medicines. For instance, in India the combined taxes and tariffson imported medicines are 55 per cent; in China, they are 28 per cent.

But this reality has not stopped governments acting to undermine IP. Inearly 2007, the then Thai military government waived the patents of threepatented medicines through a process called "compulsory licensing".Compulsory licensing is an instrument recognised under the World TradeOrganisation's Trade­ Related Aspects of Intellectual Property Rights(TRIPS) Agreement, and grants governments the ability to licence theproduction of patented products "in the case of a national emergency orother circumstances of extreme urgency or in cases of public non-commercialuse".

Now the WHO has waded into the debate. Last year, a WHO-designated teamassessed the Junta's actions and later issued a brief report legitimisingthe government's actions, which was followed by a how-to guide for countriesto waive their international obligations and issue compulsory licences.

This report is feeding into a WHO-initiated Intergovernmental Working Group(IGWG) on Public Health, Innovation and IP formed in 2006. From itsinception the IGWG has been an attempt for health bureaucrats and theactivists that advise them to rewrite - and undermine - global IP rules. The activists are now using their campaign against IP on medicines as aprecedent to continue their assault on IP; and global warming has become thenew battleground.

In a joint statement at the 2007 G8 summit, the governments of Brazil,China, India, Mexico and South Africa called for an agreement to assist incompulsory licensing the IP related to carbon dioxide emission-mitigatingtechnology being developed wealthy countries.

In subsequent media reports the officials argued an agreement is needed"paralleling the successful agreement on compulsory licensing ofpharmaceuticals". Similar themes appeared in a resolution passed by theEuropean Parliament in November last year recommending a study to assessamending TRIPS "to allow for the compulsory licensing of environmentallynecessary technologies".

And the tragedy is that those who are likely to suffer most are the world'spoor. Technology transfer is also vital for developing countries to growtheir economies and improve their standards of health and the environment. A 2006 World Bank study and a 1998 International Energy Agency /UNEP studyhave identified that strengthening IP rights assists in technology transfer.

The World Intellectual Property Organisation has designated 2008 as the yearfor "celebrating innovation and promoting respect for IP". With the IGWGconvening in Geneva in a few days' time and the assault on IP onclimate-friendly technologies, World IP Day - which was on Saturday -increasingly seems to be an occasion to reflect on IP's demise.

(The writer is director of the IP and Free Trade Unit at the Institute ofPublic Affairs in Melbourne.)

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