Preliminary views on a proposal for the establishment of a
development agenda for WIPO

Prepared by the Commission on Intellectual Property submitted to the WIPO Intersessional Intergovernmental Meeting on a Development Agenda for WIPO, 11-13 April 2005

ICC represents small and large businesses from all sectors worldwide, including many in developing countries (DngCs), and least developed countries (LDCs) Its mandate is to "foster the economic growth of developed and developing countries alike, particularly with a view to better integrate all the countries into the world economy" and to "expand[..] the international flow of goods, services, capital and technology".

WIPO work on development
In keeping with its global membership and mandate, ICC supports the continuation, improvement and expansion of WIPO's assistance programs, to enhance the ability of developing countries to fully benefit from and exploit intellectual property, as one element of a larger policy framework to promote development.

ICC also supports the active involvement of non-governmental observers in the WIPO process, which can bolster efforts to further improve the international intellectual property system.

WIPO already cooperates actively with DngCs and LDCs to "maximize the use and effectiveness of IP as a tool for economic, social and cultural development" under the "Cooperation for Development Program" , thereby improving their capacity to integrate and make better use of the IP system . Moreover, the existing Permanent Committee on Cooperation for Development Related to Intellectual Property (PCIPD) also seems to be involved in many of the issues now raised with respect to the development aspect of the intellectual property system. In view of WIPO's budgetary limitations and in order to avoid creating redundancies among different bodies in WIPO, ICC takes the view that any possible new horizontal issue related to intellectual property and development should be addressed by this committee, presumably without a substantial deviation from its original purposes.

ICC fully supports the work done so far by WIPO in thi s context, and is confident that, considering the existing limitations, substantial progress has already been achieved in helping DngCs and LDCs benefit from the intellectual property system.

It is therefore clear that WIPO already has a mandate to discuss issues concerning the effect of intellectual property protection on development and, as noted above, has an active work programme in this regard. Therefore ICC does not see a need to pursue an amendment to WIPO's Convention to continue that work programme. It is also clear that observers from business, academia and civil society are already given an appropriate opportunity to participate in WIPO's discussions.

Role of intellectual property in development and technology transfer
While adequate protection of intellectual property rights is a necessary pre-condition for development as a tool to promote innovation, creativity, cultural diversity and technological development, additional measures are required by countries to make use of the full potential of such rights. The study "Intellectual Property and Development, Lessons from Recent Economic Research", a co-publication of the World Bank and Oxford University Press, 2005 (p. 54) refers to other necessary components:

"Moreover, it must be emphasized that strong IPRs alone are insufficient for generating strong incentives for firms to invest in a country.
(...)
Seen in the proper policy context, IPRs are an important component of the general regulatory system, including taxes, investment regulations, production incentives, trade policies, and competition rules. As such, it is joint implementation of a pro-competitive business environment that matters overall for FDI (...)"

As discussed in more detail below, good governance and sound education policies are also critical.

It is of utmost importance to establish that the TRIPS objective concerning "the promotion of technological innovation and [ ] the transfer and dissemination of technology" represents a commitment taken by the governments of member countries, both of developed countries (DCs) and DngCs, as well as LDCs. DCs are however expected to assist DngCs and LDCs in the implementation of TRIPS by means of appropriate cooperation .
Governments are invited to look seriously into possible new mechanisms, consistent with TRIPS, to foster the transfer of technology , without resorting to overly simplistic solutions that might inadvertently jeopardize the goal of the intellectual property system to promote innovation and creativity by creating additional burdens on intellectual property owners. Moreover, particular emphasis should be given to compliance with existing intellectual property rules, including but not limited to those established by TRIPS.

Apart from adequate intellectual property legislation and an effective enforcement regime, a well-functioning and funded intellectual property office is an essential prerequisite for an intellectual property system to work properly.

Without the deep commitment of each government to establish in its own country an appropriate infrastructure to process and make use of intellectual property rights, nothing practical will result from the discussions related to the current proposal for a Development Agenda in WIPO.

Despite concerns raised by some countries as to the immediate costs - financial, political and impact on internal policies - of impl ementing TRIPS-compliant legislation, it is important to focus on the long term results of that implementation. The Swedish National Board of Trade, in its study "Consequences of the WTO-agreements for Developing Countries", March 2004, concludes the following (p. 242) :

"In the longer term, however, the analysis indicates that an effective intellectual property rights system can have positive economic consequences in the developing countries, particularly in the form of transfer of technology, whether this is done via direct foreign investments or via licensing. However, one important factor in this context is the capacity of each country to absorb new technology. In consideration of this, most analyses propose that developing countries should focus their resources on measures that aim at better governance, educational initiatives, targeted technical incentives and an improved competition policy. ()"

Korea is an exceptional example of a country that succeeded in accelerating its development by means of massive investment in basic education and by focusing universities on technology research in order to produce patentable inventions. Close cooperation between universities and industry was also a key element in this process.

The study "Intellectual Property and Development, Lessons from Recent Economic Research", a co-publication of the World Bank and Oxford University Press, 2005 (p. 13) concludes the following as to the possible impact of TRIPS on the ability of governments to adopt their own national policies :

"Although the current international framework for the protection of intellectual property provides for some degree of harmonization of global IPR standards, TRIPS, in particular, still leaves important room to adjust IPR norms to domestic needs."

It is therefore within this framework that new solutions for fostering the transfer of technology and promoting the development of DngCs and LDCs should be sought.

Many DngCs and LDCs aspire to promote the local manufacture of inventions patented in their respective territories. Although a decision to concentrate production in a few plants around the world generally derives from commercial strategies, poor protection and enforcement of intellectual property rights constitute an additional barrier to the transfer of technology to local companies where this would otherwise be considered. The study of the World Bank and Oxford University cited above contains several references to this fact, e.g. (p. 8):

"The results () suggest that weak IPRs have a negative effect on the likelihood of investments being made. In addition, the enforcement of IPRs affects the type of investments made: companies tend to avoid investing in local production if IPRs are weak and concentrate instead on distribution facilities. (...) These results are consistent with the notion that intellectual property protection stimulates formal technology transfer."

Theoretical and empirical data as to the importance of intellectual property protection to development and transfer of technology can also be found in available literature (see "Intellectual Property, a Power Tool for Economic Growth", Kamil Idris, published by WIPO).

Conclusion
In conclusion, ICC believes that intellectual property protection i s a necessary pre-condition for development and techonology transfer, but needs to be supported by other policy measures for its full potential to be realized. ICC therefore supports current and future WIPO programs directed at cooperation with developing countries and LDCs that increase the awareness of the intellectual property system and provide guidance on how to derive more benefits from it. ICC also believes that WIPO's current mandate and activities already allow for discussion and implementation of issues related to intellectual property and development within existing WIPO bodies.

Document n° 450/998
4 April 2005