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Trade-Related Aspects of Intellectual Property Rights and the South
by Newropeans-Magazine
2010-07-03 08:16:45
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Towards the end of the 1970s, major commercial interests in the US started to campaign for the removal of responsibility for the protection of Intellectual Property Rights (IPR) from the World Intellectual Property Organisation (WIPO). High-tech corporations, computer software and microelectronics, entertainment, chemicals, pharmaceuticals, and biotechnology argued that they were suffering serious economic losses due to the inadequate level of global protection provided for intellectual property.

Their efforts were ratcheted up during the 1980s and increasing pressure was placed on the United States Trade Representative (USTR) to more vigorously protect and promote IPR internationally. At the same time, US corporations began to synchronise their lobbying efforts to press for changes in US intellectual property trade policy.

Member nations of the Organisation for Economic Co-operation and Development (OECD) were encouraged to promote increased IPR globally, as they would also benefit from the ‘economic rents’ of intellectual property. The OECD supported the US campaign to promote strengthened IPR during the General Agreement on Tariffs and Trade (GATT) Uruguay Round, which led to the creation of the World Trade Organization (WTO).

At the same time, major multinational corporations such as Monsanto, Pfizer and IBM played central roles in mobilising executives in other multinationals to play a greater role in supporting an expanded, effective IPR implementation system globally.

► The South (Southern Hemisphere) and TRIPS Negotiations

The initial stages of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) negotiations were dominated by the technology-exporting members, such as the US, EC and Japan. The South was barely involved given its overall lack of IPR expertise. As the negotiations progressed and the South´s involvement, its general opposition to TRIPS was clear.

For the South, the US and the North (Northern Hemisphere) appeared intent on promoting IPR for the benefit of its technological industries with scant consideration of its potential impact upon the economic welfare of the South. A further concern was the differing ethical standards as to what exactly would be protected by an intellectual property agreement under the WTO. India, for instance

did not allow product patents for pharmaceuticals, foods, or agrochemicals because such patents would deny people access to what they needed for food and health. (Marlin-Bennett, 2004: 64)

The Indian patent system was based on sui generis ownership, which permitted community patenting of the biodiversity of each community. It was hardly surprising, therefore, that India was amongst the strongest opponents with respect to granting patents in the technological fields, such as pharmaceuticals, chemicals and micro-organisms.

Other countries also had differing systems of intellectual property protection. China and Egypt, for instance, granted patents on pharmaceutical processes, rather than on the final products, thus enabling the local manufacture of generic medicines at considerably reduced prices.

Despite the dangling of carrots by the North in the form of improved trading arrangements for states in the South, should they agree to improved IPR protection, this method of persuasion proved insufficient in itself. In fact, the US and its allies had to resort to applying intensive pressure in order to obtain the South´s acquiescence to TRIPS.

A major weapon in the North’s arsenal was the application of the ‘Special 301’ provision by the United States Trade Representative (USTR). This provision stipulates that the USTR is required to take note of countries that fail to provide an adequate level of IPR protection and if necessary impose trade sanctions. The first use of the ‘Special 301’ provision was in 1985 when the US pharmaceutical industry protested that Korea’s IPR laws were insufficient to protect their rights in this area. After two years of negotiations, Korea was obliged to amend its IP laws as demanded by the US.

The threatened application of this provision against a range of counties together with its actual application against Brazil, which led to the imposition of tariffs on paper products, non-benzenoid drugs and consumer electronic items, the US was able to place intense pressure on countries in the South, thus greatly neutralising opposition to TRIPS.

The debt crisis and ensuing intervention of the International Financial Institutions (IFIs), who strongly supported the North’s IPR demands, in many ‘developing’ countries also placed extra pressure on the South to accede to TRIPS. The debt crisis

effectively put a large number of countries, including some of the more powerful developing countries, into receivership. International Monetary Fund and World Bank conditionalities were based upon an export dependent strategy, and many of these countries were “advised” to participate constructively in the Uruguay Round negotiations as part of the strategy for recovery… The cumulative effect of these developments was to erode developing country solidarity, isolate them [Indian negotiators] intellectually, and weaken them tactically. (Sen, 2001: 8-9)

By the conclusion of the Uruguay Round negotiations, the South was a spent force with most of its members experiencing ‘negotiation fatigue’

…with only about ten countries actually sending intellectual property experts to the TRIPs negotiations. In the majority of cases, the heads of delegations to the TRIPs negotiations were from national trade ministries or directorates… In the absence of the necessary legal expertise within their national administrations, developing countries simply did not have the knowledge necessary to negotiate effectively on the content of the TRIPs Agreement. (Matthews, 2005: 44)

On the other hand, delegations from the North had access to the best business advice and counsel available with individuals from the private sector such as Pfizer CEO Ed Pratt acting as unofficial advisors to the US official delegation. When India and Brazil formulated counter-proposals to TRIPS they

were evaluated by Counsel from US industry, who were able to advise the US government negotiating team in Geneva and allow them to ‘pull rank’ in terms of technical expertise. (Matthews 2005: 45)

The TRIPS Agreement that came into force instituted

minimum global standards of IPRS protection as well as rules on enforcement, and most importantly, brought the domestic IPRS regimes of WTO Members under the jurisdiction of the WTO dispute settlement system. (Lanoszka 2003: 182)

Furthermore, the standards that were put in place were modelled on ‘western’ legal practice and established at a level analogous to those in the North.

TRIPS therefore not only defined the minimum protection levels that Member nations were to enact to protect patents but also stipulated the measures and remedies IPR holders could avail of to enforce their rights.

While the inclusion of TRIPS was ostensibly a success for the efforts of states in the North in overcoming the opposition of the South, it was primarily a success for its large-scale technological corporations. The gloating of the ex-head of Monsanto, James Enyart, regarding the ‘success’ of his lobbying group the Intellectual Property Committee (IPC) is extremely revealing and worth quoting at length:

Once created, the first task of the IPC was to repeat the missionary work we did in the US in the early days, this time with the industrial associations of Europe and Japan to convince them that a code was possible... We consulted many interest groups during the whole process. It was not an easy task but our Trilateral Group was able to distill from the laws of the more advanced countries the fundamental principles for protecting all forms of intellectual property...Besides selling our concepts at home, we went to Geneva where [we] presented [our] document to the staff of the GATT Secretariat. We also took the opportunity to present it to the Geneva based representatives of a large number of countries... What I have described to you is absolutely unprecedented in GATT. Industry has identified a major problem for international trade. It crafted a solution, reduced it to a concrete proposal and sold it to our own and other governments...The industries and traders of world commerce have played simultaneously the role of patients, the diagnosticians and the prescribing physicians.

Indeed, Enyart had every reason to feel exultant at the North´s achievement in having TRIPS included in the WTO. The US approach to IPR as “[I]nstitutionalized in its domestic laws” had not only been widely accepted globally, it was now being promoted, advanced and guarded by the principal multilateral trading system and its Dispute Settlement System.

► What TRIPS meant for the South

For many in the South, on the other hand, TRIPS was not such a positive development, as it facilitated the efforts of technologically advanced corporations in the North to maintain their lead without providing any substantial gains for the South in return. Indeed, reports carried out following TRIPS revealed that large technological corporations had benefited greatly from its incorporation into the WTO not only in guarding their IPR but also through their ability to extract greater license fees and royalties.

TRIPS seriously hinders technological latecomers in the South who might be trying to emulate the Japanese strategy of the “fast second” by reverse engineering and rapidly commercialising foreign technologies. In this respect, the TRIPS Agreement significant impedes industrial development in the South, given that the procurement of 

…proprietary knowledge has been among the key determinants of both early and late industrialization… [and the] history of intellectual property rights protection shows that countries with low levels of technological capacity have generally used weak standards until they reached a level of development at which their industries could benefit from intellectual property rights protection. (UNCTAD 2006: 172)

Furthermore, should a company based in the South wish to innovate in information technology areas such as computer assembly, chip design or software development they are obliged to integrate a number of patented processes and designs belonging to major US firms, such as Monsanto, Intel and Microsoft.

To allay these concerns, during the TRIPS negotiations the North promised increased technology transfer and greater investment flows from the more advanced nations. However, as Donal O’Connor, an ex-president of the British and Ireland Licensing Executive Society (LES), candidly admitted in his evaluation of the TRIPS Agreement this is a matter of serious dispute. Instead, the hypothesis connecting greater IPR to the transfer of technology and flow of investment to the South

has not by any means been proven. It is one that we in LES wish to accept because it is one that we in LES find attractive.

Furthermore, many in the South are adamant that TRIPS has led to biopiracy, the patenting of indigenous biodiversity-related knowledge. As Vandana Shiva explains:

Biopiracy and patenting of indigenous knowledge is a double theft because first it allows theft of creativity and innovation, and secondly, the exclusive rights established by patents on stolen knowledge and steal economic options of everyday survival on the basis of our indigenous biodiversity and indigenous knowledge. Overtime, the patents can be used to create monopolies and make everyday products highly priced.

In order for this biopiracy to be stopped, TRIPS would need to be completely overhauled so that it recognises the “collective, cumulative innovation embodied in indigenous knowledge systems”. Failure to do so will result in global corporate profits being subsidised through the appropriation of the knowledge rights of the poorest people on our planet, many of them too poor to even meet their own needs through the global market place. 


 Justin Frewen*
Galway, Ireland


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