Global Dimensions of Intellectual Property Rights in Science and Technology (1993) / Chapter Skim
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4 Harmonization Versus Differentiation in Intellectual Property Right Regimes
4 Harmonization Versus Differentiation in Intellectual Property Right Regimes
Pages 89-106
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From page 89... ...
for all countries to abide by uniform {PR regimes; there are even fewer grounds for claiming that IPR regimes should be uniformly tight. At the most general level, there is certainly no reason for countries to share social welfare functions or preference orderings that would justify uniformity in levels of protection.
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From page 90... ...
There is little in economic theory to support convergence of IPR systems on a cross-country basis, particularly if convergence means an increase in the level of protection in developing and industrializing countries. This is true either from an individual country standpoint or from a global welfare perspective.
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From page 91... ...
. 49 countries exclude from patent protection pharmaceutical products, 45 exclude animal varieties, 44 exclude methods for treatment of human and animal body, 44 exclude plant varieties, 42 exclude biological processes for producing animal and plant varieties, 35 exclude food products, 32 exclude computer programs, 22 exclude chemical products, 14 exclude nuclear inventions, 10 exclude pharmaceutical processes, 9 exclude food processes, 9 exclude microorganisms and 7 exclude substances obtained by microbiological processes."
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From page 92... ...
J.5 Yet why specifically IPR regimes that do not conform to the paradigmatic case (as defined by developed c~ollntriP.~N Pro. the ones resulting from bureaucratic or legislative failure is _ ~ _ A A _^ ~ _ _ ~ ~ -~ far from clear.
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From page 93... ...
The theory of intellectual property protection is fragmented and provides no robust answer to the questions of appropriate or optimal level of protection under various sets of real world circumstances. In particular, its relevance to developing country concerns must be considered marginal."
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From page 94... ...
This set of subactivities can be conceptualized as originating from adaptive efforts: scaling down imported processes and making them consistent with the use of local raw materials; changing product characteristics, including redesign to conform with the local environment; improving productivity through minor innovations and controlling for product quality; replicating and progressively mastering all aspects of the existing technology; and finally, engaging in formal and structured R&D, while engineering the processes to bring new products to the market. Thus, when choosing levels of protection, countries with a productive base face the following closed-economy trade-off: how to establish a structure of incentives (in terms of levels of protection)
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From page 95... ...
What then should be the scope and mechanism of protection? How should IPR regimes be tailored to individual sectors or particular technologies, consistent with the stage of development of the country or its particular circumstances?
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From page 96... ...
For industrializing countries, it is arguable that the patentability of products might precede that of processes, being more consistent with their small to moderate research capabilities in the engineering of processes, but only marginal ability to introduce new products to the market. The continuing inability of most countries to bring out new products suggests that more or even full protection of foreign product innovations in these areas will not have a detrimental effect, except on those firms that basically copy locally unpatentable products (but have failed so far to develop research capabilities of any significance)
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From page 97... ...
Clearly, however, protection should be regarded as only one of the stimuli for innovation. Again, in the development of a new class of drugs for tropical diseases, potential demand may not materialize due to low income levels of those affected.
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From page 98... ...
Thus, insofar as "the costs imposed by standardized patent terms are not very significant," patent life should be uniform among industries and technologies at least for the sake of simplifying administrative procedures (see Primo Braga, 1990:32~. Yet cross-country uniformity does not necessarily follow from these propositions much less, a clear justification for adopting a particular patent life standard.
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From page 99... ...
Pressure from trade and investment partners is finding less resistance among developing countries with relatively mature production and innovation systems. Additionally, industrializing countries are being induced to change their IPR regimes due to changes in international economic relations (with globalization of production)
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From page 100... ...
. In case of investment decisions, in particular, the fundamental considerations were market size and growth prospects, factor supply and costs, and macroeconomic and political stability (country risk)
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From page 101... ...
at a time when the government, due to a chronic fiscal imbalance, has cut public sector wages and budgetary allocations to its agencies, including those engaged in agricultural research. Even more important, domestic researchers cannot interact with their foreign counterparts engaged in biotechnology research: for one, they have nothing "to offer" that is not already freely available and l 1Major research institutions in plant genetics have been the Instituto Agronomico de Campinas, Escola Superior de Agricultura Luiz de Queiroz, the Federal University of Vicosa, and Embrapa (Empresa Brasileira de Pesquisa Agropecuaria)
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From page 102... ...
Granting some form of protection to local breeders such as joining the International Convention for the Protection of New Plant Varieties (UPov~l4 will allow them to discuss commercial terms and exchange rights with foreign genetic engineering firms, particularly those of small and medium size that would be interested in penetrating a potentially large market for their products. For biotechnology firms, some form of protection (possibly patents)
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From page 103... ...
Before attempting to answer this question, it is useful to take a short detour and note the welfare implications of patent protection in a "North-South" context, usually modeled by having research capabilities concentrated in northern firms, while those in the South are able to appropriate research results without cost. In this class of models, free riding by the South generally improves its welfare and correspondingly diminishes that of the North whose firms, of course, always benefit from having their patents recognized in other countries.l6 Note that this result holds as long as the South is a small part of the world market for the good subject to improvement, so that free riding by the South does not constitute a major disincentive to innovators and that cost savings associated with R&D are not substantial; if they were substantial, the gains to the South from additional R&D undertaken by northern firms in response to a strengthening of the South's IPR regime would more than compensate its income losses.
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From page 104... ...
These theoretical or simulation results, derived from recent models ex amining the welfare economics of patent protection in North-South contexts, do not suggest that global welfare would be increased by a uniform system, except in the case where the welfare of all countries is valued equally and distribution issues are mute. In this latter case, global welfare would improve by having some countries increase their levels of protection to a common minimum.
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From page 105... ...
The links between IPR protection and innovation have yet to be shown to be on a scale that would justify such social engineering efforts in the name of global welfare maximization. There is no question that firms in developed countries lose potential income by having competitors in industrializing countries produce the fruits of their inventiveness.
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From page 106... ...
1990. Guidance from economic theory.
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