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Archived updates for Tuesday, April 19, 2005

Indian Statement on Wipo Development Agenda

The following is excerted from the "Statement by India at the Inter-Sessional Intergovernmental Meeting on a Development Agenda For WIPO, April 11-13, 2005":

The primary rationale for Intellectual Property protection is, first and foremost, to promote societal development by encouraging technological innovation. The legal monopoly granted to IP owners is an exceptional departure from the general principle of competitive markets as the best guarantee for securing the interest of society. The rationale for the exception is not that extraction of monopoly profits by the innovator is, of and in itself, good for society and so needs to be promoted. Rather, that properly controlled, such a monopoly, by providing an incentive for innovation, might produce sufficient benefits for society to compensate for the immediate loss to consumers as a result of the existence of a monopoly market instead of a competitive market. Monopoly rights, then, granted to IP holders is a special incentive that needs to be carefully calibrated by each country, in the light of its own circumstances, taking into account the overall costs and benefits of such protection.

Should the rationale for a monopoly be absent, as in the case of cross-border rights involving developed and developing countries, the only justification for the grant of a monopoly is a contractual obligation, such as the TRIPS agreement, and nothing more. In such a situation it makes little sense for one party, especially the weaker party, to agree to assume greater obligations than he is contractually bound to accept. This, in short, is what the developed countries have sought to do so far in the context of WIPO. The message of the Development Agenda is clear: no longer are developing countries prepared to accept this approach, or continuation of the status quo.

Even in a developed country, where the monopoly profits of the domestic IP rights holders are recycled through the economy and so benefit the public in varying degrees, there is continuing debate on the equity and fairness of such protection, with some even questioning its claimed social benefits. Given the total absence of any mandatory cross-border resource transfers or welfare payments, and the absence of any significant domestic recycling of the monopoly profits of foreign IP rights holders, the case for strong IP protection in developing countries is without any economic basis. Harmonization of IP laws across countries with asymmetric distribution of IP assets is, clearly, intended to serve the interest of rent seekers in developed countries rather than that of the public in developing countries.

Neither intellectual property protection, nor the harmonization of intellectual property laws leading to higher protection standards in all countries irrespective of their level of development, can be an end in itself. For developing countries to benefit from providing IP protection to rights holders based in developed countries, there has to be some obligation on the part of developed countries to transfer and
disseminate technologies to developing countries. Even though the intended beneficiary of IP protection is the public at large, the immediate beneficiaries are the IP rights holders, the vast majority if whom are in developed countries. Absent an obligation on technology transfer, asymmetric IP rent flows would become a permanent feature, and the benefits of IP protection would forever elude consumers in developing countries. As pointed out in the proposal by the Group of Friends of Development, technology transfer should be a fundamental objective of the global intellectual property system. WIPO is recognised as a specialised agency with the responsibility for taking appropriate measures for undertaking this and we expect the "development agenda" to address this issue.

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In conclusion, it is important that developed countries and WIPO acknowledge that IP protection is an important policy instrument for developing countries, one that needs to be used carefully. While the claimed benefits of strong IP protection for developing countries are a matter of debate - and nearly always in the distant future - such protection invariably entails substatial real an immediate costs for
these countries. In formulating its IP policy, therefore, each country needs to have sufficient flexibility so that the cost of IP protection does not outweigh the benefits. It is clearly in the interest of developing countries that WIPO recognizes this and formulates its work program accordingly - including its 'technical assistance' - and not limit its activities, as it currently does, to the blind promotion of increasingly higher levels of IP protection. This is where WIPO, as a
specialized UN agency, can make a major impact - by truly incorporating the development dimension into its mission - in letter and in spirit, so that it is appropriately reflected in all its instruments. Certainly it will result in a revitalisation of WIPO as an organisation sensitive to integrating the development concerns of developing countries into all areas of its work.
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