With the differing position of industrialized and developing economies in mind, do you believe that economic development is contingent

upon increased intellectual property protection?

*Natasha Odarkai Lamptey Introduction Intellectual Property protection is concerned with protecting intangible property rights in patents, trademarks, goodwill and copyright from unauthorized use.1 It aims at promoting invention in arts and sciences by ensuring that creators are adequately compensated for their inventions. This protection is given through national legislation and international treaties.2 The enforcing of Intellectual Property Rights (IPRs) is important for two main reasons, the first is the need to prevent their use by persons who have no right to such use and the second is the need to prevent rights holders from extending the grant of their rights beyond the time granted by Intellectual Property Law.3 In spite of the global nature of the world today, there is a vast gap between the developing and developed world as far as advancement in arts and science are concerned. This gap is due to the lack of a vibrant creative industry in the developing world and the inability of developing nations to tap into the technological advancement of developed economies due to strict intellectual property laws. Developed economies believe that creators must have exclusive rights to their inventions and that these rights must be protected from unauthorized use, that is, use without the requisite compensation; while developing nations argue that developed nations monopolize technological discoveries through the use of a strict intellectual property regime in order to exclude them from their enjoyment.
1*Ghanaian Legal Practitioner and Student at University of Strathclyde, Glasgow-Scotland. * http://www.wipo.int/about-ip/en/ There are two main types of IPRs: those that are designed to protect reputation such as trademarks and geographical indications and those that stimulate invention and creation such as industrial designs, patents, copyright, and utility models. 2 Intellectual property encompasses the legal rights which accrue from intellectual activity in the industrial, scientific, literary and artistic fields. Most nations have laws to protect intellectual property in order to protect the internationally recognized moral and economic rights of creators in their inventions and the rights of the public in access to the inventions, as well as to ensure the promotion of creativity and the sharing of the outcome of such creativity in furtherance of development. 3 Though this may be the main reasons behind the enforcement of IPRs, it must be noted that there are many collateral reasons that influence the economic value and consequently the need to enforce IPRs. An extensive discussion on this point may be found in the work of Keith E. Maskus in his paper, The International Regulation of Intellectual Property, (1998) available at citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.201

In this essay, I shall examine the international attempts at intellectual property protection. I shall then discuss how intellectual property affects economic development, transfer of technology, innovation and creativity in order to determine whether economic development is contingent upon increased intellectual property protection in order to determine whether development is reliant upon increased IPRs.

Global Regime for Intellectual Property Protection IPRs globally have been based on multilateral and bilateral treaties.4 Today, intellectual property protection is regulated mainly by the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) by World Trade Organization (WTO) that sets minimum standards for intellectual property protection for each signatory state. However, there are many bilateral and multilateral agreements in force signed by states both before and after TRIPS to enforce IPRs. The first attempt at a global intellectual property regime was the Paris Convention5 for the Protection of Industrial Property of 1883.6 The convention was made because of practical difficulties in getting intellectual property protection. For instance, the intellectual property laws of states differed such that it was quite difficult to obtain protection for an invention in a state other than that of the inventor. Initiating patent applications concurrently different states was difficult because the process in one nation invalidated any application made in another state. 7 This difficulty had to be surmounted to harmonize the intellectual property laws of nations.8 To provide a common Intellectual Property regime, the Paris Treaty was signed by 11 states in 1883 with another three signing it when it came into force in 1844. 9 The treaty provided four main means of protection. The first which was a basic right was the right to national treatment10 and contained substantive law. The second part, the right of priority allowed an applicant (or his successors in title) in one signatory state to apply for the same protection within
4 Mac Queen, Waelde, Laurie and Brown, Contemporary Intellectual Property Law and Policy, (London: Oxford University Press, 2011) p. 25. 5 The intention of the treaty was to protect patents, utility models, industrial designs, trademarks, service marks, trade names, indications of source or appellations of origin, and the repression of unfair competition. 6 Mac Queen, Waelde, Laurie and Brown, Contemporary Intellectual Property Law and Policy, (London: Oxford University Press, 2011) p. 26. 7 WIPO Intellectual Property Handbook: Policy, Law and Use (WIPO, 2004) available at http://www.wipo.int/export/sites/www/about-ip/en/iprm/pdf/ip_handbook.pdf 8 Seth M. Reiss, Commentary On The Paris Convention For The Protection of Industrial Property. Lex-IP.com available at http://www.lex-ip.com/Paris.pdf

9 WIPO Intellectual Property Handbook: Policy, Law and Use. Chapter 5 International Treaties and Conventions on
Intellectual Property p. 247 available at http://www.wipo.int/export/sites/www/aboutip/en/iprm/pdf/ip_handbook.pdf

six to twelve months in all the other signatory states. The third part provided that substantive legal rules are enacted in all signatory states to provide Intellectual property protection while the final part was concerned with the administrative structure for the implementation of the treaty. Arguably, the main effects of the Paris Treaty are the national treatment provision and the priority treatment provision. My understanding of the national treatment provision is that, for the first time, applicants for IPRs from foreign signatory state would be granted the same protection as domestic applicants; while the priority treatment provision which was established by Article 4 of the treaty means that an applicant from a signatory state can use the initial date of filing in any one of the signatory states as the effective filing date in any other signatory State, provided that the following application is filed within 12 months in case of utility models and patents and 6 months in case of and trademarks and industrial designs.11 The Paris convention currently has a total number of 17412 and the treaty remains the genesis of a wide array of international conventions aimed at protecting intellectual property. It has been followed by many other treaties including the Berne Convention for the Protection of Literary and Artistic Works, the WIPO Copyright Treaty (WCT), the Patent Cooperation Treaty (PCT), the TRIPS Agreement just to mention a few. These treaties form the basis on which the international IPR law is built.13 As new technologies for copying and distributing material emerge, flaws in the existing laws protecting IPRs become apparent and newer regimes are introduced to effectively combat the
10 The provisions governing this protection were found in articles 2 and 3 of the Paris Convention. It required that states should grant the same level of protection to their nationals (both legal and natural persons) as well as nationals of other states who were co-signatories of the treaty. This particular protection was extended to nationals of nonsignatory states so long as they were domiciled in a signatory state of the Convention. See Paris Convention at http://www.wipo.int/treaties/en/ip/paris/trtdocs_wo020.html 11 James J. Fawcett and Paul Torremans Intellectual Property and Private International Law, (Oxford: Oxford University Press, 2011) p. 686-68: This means that when an applicant files an application for an intellectual property protection (whether patent or trademark) in a in a signatory state of the treaty, the application is treated as if it came from a citizen of this foreign country. In addition to this, if the intellectual property protection is conferred on him, that is if the patent or trademark is granted, the owner is granted the same protection and the same legal remedies against any infringement just as though the right owner was a national owner of the intellectual property right. Further discussion on the matter may be obtained from. 12 A full list of the contracting parties is kept by the World Intellectual Property Organization, with details of the date of accession and entry into force. This list is available online at the WIPO website and may be accessed at http://www.wipo.int/treaties/en/SearchForm.jsp?search_what=C 13 There continues to be a surge of International Treaties, both multilateral and bilateral aimed at protecting Intellectual Property Rights. New technologies for by passing these inventions lead newer conventions and treaties. A discussion of this phenomenon is contained in an article: Needed a new system of Intellectual Property Rights by Lester Thurow available at http://chuckthomas.us/PhilaCenter/Class_11/Needed_a_New_System_of_IP_Rights.pdf

problems that arise from the existing laws. I believe the most important IPR treaty today is the TRIPS Agreement which is designed to breach the difference in the manner in which IPRs are protection throughout the world. The treaty sees IP rights as economic rights14 and states the minimum level of IP protection expected from each WTO member state as well as a system through which disputes of alleged breaches of IP standards may be resolved.15

The Debate Developed countries (countries, usually in Western Europe, North America and some parts of Asia that have a high per capita income and are highly industrialized,) support their development through the provision of goods and services that are highly protected by Intellectual property and therefore support strong IPRs on the international stage. Developed nation, argue that IPRs are a major factor in development since they not only increases foreign direct investment (FDI) from other countries,16 but also creates a means through which inventors and the investors who fund their research can recoup their investments. Their argument is supported by researchers such as Smarzynska Javorcik,17 who in 2004 found that strong IP protection supported foreign direct investment18: the practice through which people from one nation obtain proprietorship of resources in order to control manufacture and distribution of a company in another nation. Smarzynska found that strong IPRs significantly promotes FDI in the technological sector and that in some cases strong IPRs change the type of FDI from sale-based to manufacturing.19 This research finding is not isolated, in 1996 Lee and Mansfield conducted a study to establish the relationship between FDI and IPRs. After polling a hundred American companies, they found a positive correlation between IPRs and FDR.20
14 See Commission on Intellectual Property Rights, Integrating Intellectual Property Rights and Development Policy 6 (2002) (U.K.), Available At http://www.iprcommission.org/papers/pdfs/final_report/CIPRfullfinal.pdf, note 3 at 6. 15 The main objectives of TRIPS is contained in article 7 of the treaty which says, The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations. This is available at http://www.worldtradelaw.net/uragreements/tripsagreement.pd 16 Foreign direct investment occurs when a foreigner holds 10% or more of a company in a foreign nation. 17 Beata Smarzynska and Javorcik, B. (2004) The Composition of Foreign Direct Investment and Protection of Intellectual Property Rights: Evidence from Transition Economies. European Economic Review 48(1) p.3962. 18 Ibid p.3962. 19 Beata Smarzynska and Javorcik, B. (2004) The Composition of Foreign Direct Investment and Protection of Intellectual Property Rights: Evidence from Transition Economies. European Economic Review 48(1): 3962.

20 Lee, J.-Y. and E. Mansfield, Intellectual Property Protection and US Foreign Direct Investment. (Review of
Economics and Statistics 1996) 78 (2): 181186. The countries surveyed were Argentina, Brazil, Chile, Hong Kong, India, Indonesia, Mexico, Nigeria, Philippines, Singapore, South Korea, Thailand and Venezuela.

Other arguments proffered by developed nations in support of their position that stronger IPRs are better for economic development include: strong IPRs promote creativity, support research and development, ensure consumers of quality, and helps to prevent other crimes. The argument that strong IPRs promote creativity is based on the notion that if the inventions of authors and creators are not adequately compensated for their work, they would not be motivated to create.21 Likewise, financiers of such inventive processes, who are businessminded, would have no incentive to invest money into the research and development of new technologies if they cannot be sure of recouping their investments and making a profit. Low level of IP protection means that counterfeiters (who are competitors of the rights owners) and not the right owners themselves would benefit from the investment into research and development of products.22 Developed nations also argue that strong IPRs serve to ensure consumers that products are of the highest quality. Consumers of counterfeited goods receive much less than they pay for and this can have dire consequences. For instance, weak IP laws would mean that drugs can easily be counterfeited. Counterfeited drugs usually do not have the standard level of active ingredients and therefore can results in aggravation of medical conditions and even death.23 Developed nations also argue that the enforcement of strong IP helps to prevent other crimes. Due to their illegal nature; it is difficult to obtain adequate statistics on the magnitude and effects of intellectual property infringement, however, it is certain that the requisite taxes are not paid on these items resulting in the lack of resources available to governments to fund development projects in countries where they are made and countries where they are exported to.24 Developing nations, (nations that have a low living standard, undeveloped industrial base, and low Human Development Index (HDI)25) on the other hand, make several sound arguments in
21 Presented at the World Intellectual Property Organization Advisory Committee On Enforcement, Fifth Session Meeting In Geneva On November 2-4, 2009. The paper was first published by the International Center for Trade and Sustainable Development (ICTSD) as part of Issue Paper No. 22, The Global Debate on the Enforcement of Intellectual Property Rights and Developing Countries and is available at http://ictsd.net/i/publications/42762/. 22 Maskus, K.E. (2004) The Role of Intellectual Property Rights in Encouraging Foreign Direct Investment and Technology Transfer, and C. Fink and K.E. Maskus, Intellectual Property and Development: Lessons from Recent Economic Research, (New York: World Bank and Oxford University Press, 2005) p. 4174. 23 Carsten Fink, Enforcing Intellectual Property Rights: an Economic Perspective, in The Global Debate on the Enforcement of Intellectual Property Rights and Developing Countries, Issue Paper No.22, at xv (ICTSD, 2009) p. 6-7. 24 Nathan Associates Incorporated for USAID, Briefing Paper 2003:Intellectual Property and Developing Countries, (Washington: 2003) p. 6. 25 Farlex Financial Dictionary. "Financial Definition of less-developed country". TheFreeDictionary.com. Farlex, Inc and Sullivan, Arthur; Steven M. Sheffrin, Economics: Principles in Action, (New Jersey: Pearson Prentice

support of their position that strong IPRs curtails development and that a relaxation of the system is needed to promote the growth of emerging economies. These arguments include: exclusive rights give conglomerates huge market power and thus enables them to charge exorbitant prices, high levels of IPRs leads to increase in costs of necessary commodities and, that IPRs provide an avenue to exclude native societies from the enjoyment of traditional knowledge and remedies. Developing nations: led by China and India seek to make developmental gains by copying previously invented goods, usually through reverse engineering and argue that IPRs grant unlimited exclusive rights and market power to multinational companies which prevent new players from entering the manufacturing business. This is because companies that develop new products gain temporary monopolies through IPRs and charge exorbitant prices for goods and services they have developed, sometimes ensuring high prices by decreasing production. This prevents the inhabitants of developing nations from accessing these goods (because they cannot afford them) which in some cases have led to dire consequences such as the inability to access anti-retroviral drugs in sub-Saharan Africa due to their high costs. These occurrences also lead to decrease in trade with developing nations because multinational firms gain more from IP licenses than from direct trade.26 Another argument made by developing nations in is that IPRs facilitate bio piracy27 (the exploitation of indigenous knowledge about natural resources from native people with no or inadequate compensation given in exchange.28) such as when extracts from a well-known North African medicinal plant: Artemista judaica was patented by a United Kingdom company called Phytopharm Plc. for the treatment of diabetes. Though the Company admitted that the plant has been brewed as traditional Libyan medicine for the treatment of diabetes for hundreds of years, the US Patent Office has granted a patent to Phytopharm Plc.29 I have found that the most important argument made by developing nations against the employment of strong IPRs is that they have inhumane consequences, especially when it comes to accessing drugs to protect human life.30 For instance the cost of HIV drugs are more than most
Hall, 2003) p. 471 26 Fink, C. and C.A. Primo Braga (2004) How Stronger Protection of Intellectual Property Rights Affects International Trade Flows. In C. Fink and E. Mansfield (eds) Intellectual Property and Development: Lessons from Recent Economic Research, p. 1940. New York: World Bank/Oxford University Press. 27 Grote, U. (2007) Environmental Labeling. Protected Geographical Indications and the Interests of Developing Countries. Paper presented to the Symposium on the Law and Economics of Geographical Indications. Giessen, Germany, 68 September. 28 http://www.thefreedictionary.com/biopiracy 29 http://www.ghanaweb.com/public_agenda/article.php?ID=5062 30 See Frederick M. Abbott, WTO TRIPS Agreement and Ist Implications for Access to Medicines in Developing Countries, Study Paper 2a, Commission on Intellectual Property Rights 53-54 (2002).

patients in developing countries can afford. Most HIV/AIDS patients are in sub-Saharan Africa, and they could not afford the necessary drugs. In South Africa, a shortage in anti-retroviral drug supply was blamed on strong IP protection of patented anti-retroviral drugs which prevented cheaper substitutes from being made.31

Opinion I am tempted to argue that developing nations have scarce resources and should not be expected to devote as much resources as their developed counterparts to enforce IPRs. However, this attitude has dire consequences for consumers and the economies for both developed and developing nations. Lack of IPRs leads to consumers buying inferior goods packaged with a counterfeited trademarks which leads to economic loss and injury to the consumer. 32 In such cases, both the consumer and the mark owner suffer as the mark owner loses its reputation and goodwill as well as revenue through the sale and purchase of the counterfeited material while the consumer also loses. Though the mark owners in such cases may be multinational organizations from the developed world, consumers from both developed and developing nations suffer the consequences of such IP infringement. Indeed businesses suffer tremendous loses without the proper enforcement of IPR protection; Business Software Alliance found that about 45 percent of software used in France in 2006 was pirated. During the same year, 21 percent of software used in the United States and 28 percent used in Germany and 25 percent used in Japan were pirated.33 Also in 1979 a reputable brand of pesticide containing a herbicide was counterfeited and sold in Kenya and destroyed a huge portion of that nations coffee plants for the year which resulted in the loss of much needed foreign exchange. These are not isolated cases, millions of people in the developed world die from the use of counterfeited malaria drugs annually, 34 which leads to loss of man-power as well as funds to restock hospitals with the correct drugs and cure those who have been exposed to the counterfeit. It is my opinion that these events burdens developing nations as more money is
31 Amir Attaran & Lee Gillespie-White, Do Patents for Antiretroviral Drugs Constrain Access to AIDS Treatment in Africa?, 286 No. 15 J. Am. Med. Ass'n 1886, 1888 (Oct. 17, 2001). 32 Nathan Associates Inc., Intellectual Property and Developing Countries. 2003 p. 10 33 The Business Software Alliance (BSA) is a trade group established in 1988 and made up of the world's largest software producers. It is a member of the International Intellectual Property Alliance tasked with is trying to prevent copyright infringement of software made by its members. The study is available at http://w3.bsa.org/globalstudy//upload/2007-Losses-EMEA.pdf and http://w3.bsa.org/globalstudy//upload/2007Losses-Global.pdf. 34 The Oxford University Tropical Medicine and World Health Organization research together with the Wellcome Trust-Mahosot Hospital has conducted a research which revealed that millions of people in Ghana and ten other African countries are in danger as a result of the influx of fake malarial drugs onto their domestic market. The findings confirm that fake and poor quality anti-malarial drugs were threatening efforts to control the disease in Tanzania, Liberia, Sierra Leone, Nigeria, Kenya, Cameroon and other countries including China by harming patients and promoting drug resistance among malaria parasites. More information is available at http://www.ox.ac.uk/media/news_stories/2012/120116.html

required to remedy the effects of counterfeit products. For example, fake malaria drugs increase the resistance of patients thereby making treatment more expensive.35 I also believe the argument that strong IPRs necessarily lead to higher prices of drugs is incorrect. In fact, a cartel of research pharmaceutical companies have conducted studies which show that patented drugs were not necessarily more expensive because consumers have the choice of having off-patent alternatives, that is drugs whose patent time has run out and are therefore no longer patented. There are also generic drugs on the pharmaceutical market that can be accessed for low prices.36 As patented products do not prevent the sale of off-patent products, but rather adds to the existing number of products, I believe that the argument that proper enforcement of IPR does prevent access to necessary drugs is defeated. The arguments above shows that inadequate enforcement of IPRs has dire consequences for both developed and developing nations. Furthermore IP infringement leads to loss of tax revenue by governments in both developed and developing nations. Counterfeited and Substandard goods quote low prices when imported and therefore are levied low taxes which derive governments of tax revenue. Such effects, I believe, underscores the need for developing nations to accede to stronger IP protection. Another argument made by developing nations against the employment of strong IPRs is that of bio piracy discussed above. On careful consideration, I find that this argument is also flawed because patents are country specific and the fact that a foreign entity obtains a patent on traditional knowledge or technology in its own country would not prevent the native users of that knowledge from exploiting it in their own country.37

Conclusion The dichotomy between the positions of developed and developing nations is as pronounced today as it ever has been. Th proper distribution of resources for enforcing IPRs remains a big task for developing nations, where resources are scarce and there is little appreciation for intangible property like IPRs when there are inadequate drinking water, food, roads and other developmental needs. Today, industrialized countries are looking to enter into bilateral treaties with developing countries to ensure higher enforcement of IPRs than is mandatory under the TRIPS Agreement. I acknowledge that both industrialized and developing countries make sound arguments to support their position on the enforcement of IPRs, however, I am convinced that the stronger implementation of IPRs will lead to better protection for all involved. It is true that industrialized
35 See Nathan Associates Inc., Intellectual Property and Developing Countries. 2003 p. 5 36 Carsten Fink, Enforcing Intellectual Property Rights: An Economic Perspective, p. 6. 37 Emmanuel Hassan, Ohid Yaqub and Stephanie Diepeveen, Intellectual Property and Developing Countries. Rand Europe, December 2009 p. 36-45

nations have all profited from disregarding IPRs at some point and today, countries such as India and China who led recent campaigns to lower IPRs in order to promote their drive towards industrialization are pushing for stronger IPRs to protect their inventors in their new status as developed nations. The discussion above shows that the current global IPR regime, despite its flaws, serves both sides well as it protects all parties by preventing theft of inventions as well as native knowledge while at the same time providing access to use of the protected material after a period of time or after paying a stipulated fee. In light of this, I would say that economic development is conditional on a higher level of enforcement of the current regime and not necessarily increased or tighter IPR laws.