India should celebrate World IP Day

By : |April 24, 2008 0

To achieve environmental, social and economic progress, humanity needs to innovate. April 26 is World Intellectual Property (IP) Day, a day that should be about celebrating the essential role IP plays in promoting innovation. Instead, World IP Day is becoming a day to take stock of how much human innovation and ingenuity is under threat.

IP has always been a niche public policy area understood best by policy wonks and lawyers. Unless there is a major controversy, IP tends to escape public consciousness. But that is changing.

Over the past few years, campaigns to undermine IP have increased and are now reaching a fever pitch. IP is essential because it provides the property rights needed for research and development to attract investment with the prospect of a long-term dividend.

                                 

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Undermining IP is equivalent to the traditional socialist ethos – distribute the spoils of today’s research and development, rather than focusing on expanding it. And a lot is at stake — according to the most recent figures from the United Nations, the Indian patent registry receives more than 90,000 applications for patentable inventions each year.

In spite of this significant contribution, there has been a global campaign to undermine IP rights by a group of anti-market activists, self-interested politicians, vested interests, and more recently, the infiltrated World Health Organization.

Innovative medicines have been one of the big targets. These activists have argued 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 is actually government-imposed taxes and tariffs that raise the price of life-saving medicines.

For instance, in India the combined taxes and tariffs on imported medicines is 55 per cent; for China, it is 28 per cent. But this reality has not stopped governments acting to undermine IP.

In early 2007, the then-Thai military government waived the patents of three patented medicines through a process called "compulsory licensing".

Compulsory licensing is an instrument recognized under the World Trade Organization’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, grants governments the ability to license the production of patented products "in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use."

In the case of medicines, the provision was designed to ensure patented products could be mass-produced during serious public health emergencies. Yet the Thai government allowed a profit-making government agency to produce the medicines. They also compulsory licensed Plavix, a heart disease medication. A heart disease medication hardly fits within the criteria of "national emergency" or "extreme urgency."

The Thai government’s actions were an abuse of a reasonable interpretation of the TRIPS Agreement. Instead the Thai military government used it as an opportunity to reduce public expenditure on health and diverted it to boosting its own salaries and military budget.

Now the World Health Organization has waded into the debate. Last year, a WHO-designated team assessed the Junta’s actions and later issued a brief report legitimizing the government’s actions, which was followed by a how-to guide for countries to waive their international obligations and issue compulsory licenses.

This report is feeding into a WHO-initiated Intergovernmental Working Group (IGWG) on Public Health, Innovation and IP formed in 2006. From its inception the IGWG has been an attempt for health bureaucrats and the activists that advise them to re-write — and undermine — global IP rules. The activists are now using their campaign against IP on medicines as a precedent to continue their assault on IP; and global warming has become the new 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 in compulsory licensing the IP related to carbon dioxide emission-mitigating technology being developed in wealthy countries.

In subsequent media reports the officials argued an agreement is needed "paralleling the successful agreement on compulsory licensing of pharmaceuticals."

Similar themes appeared in a resolution passed by the European Parliament in November last year recommending a study to assess amending TRIPS "to allow for the compulsory licensing of environmentally necessary technologies."

And the tragedy is that those who are likely to suffer most are the world’s poor. They are the ones most likely to suffer from a lack of investment in essential medicines or the predicted consequences of not reducing carbon dioxide emissions.

Technology transfer is also vital for developing countries to grow their economies and improve their standards of health and the environment.

A 2006 World Bank study and a 1998 International Energy Agency/UNEP study have identified that strengthening IP rights assists in technology transfer.

The World Intellectual Property Organization has designated 2008 as the year for "celebrating innovation and promoting respect for IP."

With the IGWG convening in Geneva in a few days’ time and the assault on IP on climate-friendly technologies, World IP Day is becoming an opportunity to reflect on IP’s demise.

(Tim Wilson is Director of the IP and Free Trade Unit at the Institute of Public Affairs in Melbourne)

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