Patent Fever in Developed Countries & its Fallout on the Developing World

prisme6Prisme N°6 May 2005

Claude Henry

This paper examines the relationship between innovation and intellectual property rights. Over the past 25 years, the traditional balance between patent legislation and knowledge as public good has started to shift in favour of the former. The global, uniform, but flawed approach to patenting systems, driven by the United States and reflected in the TRIPS agreement, will cause negative externalities for developing countries. The paper suggests that these effects might be mitigated through appropriate instruments and prudent transposition of the TRIPS agreement into national legislations. It argues that the legal and economic foundations that have underpinned traditional intellectual property rights remain valid. Recent trends in approaches to intellectual property rights, including patent proliferation and geographical spread, are critically examined against the background of US-sponsored linkage of patent protection with free trade agreements. Examples from the life sciences and biotechnology illustrate the problems of unwarranted patents and excessive patent breadth, reinforcing doubts about the current uniformization of intellectual property rights protection, and highlighting the risk to innovation and development policy. In the final section, the paper explains how two developing countries have invoked the remedial measures embedded in the TRIPS agreement. These mechanisms include interpretative freedom, opposition procedures and compulsory licences. The paper concludes that from a Schumpeterian viewpoint, “open source” makes the main factors governing innovation more compatible than patent-based protection.