WIPO CONFERENCE ON INTELLECTUAL PROPERTY AND DEVELOPMENT Carlos M. Correa

1. WIPO CONFERENCE ON INTELLECTUAL PROPERTY AND DEVELOPMENT Carlos M. Correa Geneva, April 7, 2016

2. Intellectual property and economic development • Intellectual property innovation • Innovation economic development

3. Knowledge is the main driver of today’s global economy OECD Secretary-General, 27/05/2010.

4. Report on the International Patent System There is “[i]nconclusive empirical evidence on patent strength and innovation relationship makes it difficult to draw any conclusion about the effectiveness of patent system to encourage R&D investments”. SCP/12/3 Rev. dated 20 June 2008 http://www.wipo.int/edocs/mdocs/scp/en/scp_12/scp_12_3_rev.pdf on 29 February 2012.

5. Do Stronger Intellectual Property Rights Increase Innovation? • The study ‘tests the impact of ever more rigorous IPR systems on innovation through an index of economic complexity of 94 countries from 1965 to 2005’. • ‘Our paper offers evidence that developing countries have not enjoyed the benefits of global IPRs standarization’. • Do Stronger Intellectual Property Rights Increase Innovation? • Cassandra Mehlig Sweet,Dalibor Sacha Eterovic Maggio, World Development, vol. 66, pp 665-677, 2015.

7. The Economist Today’s patent regime operates in the name of progress. Instead, it sets innovation back. Time to fix it. • http://www.economist.com/news/leaders/21660522-ideas-fuel-economy-todays-patent-systems-are-rotten-way-rewarding-them-time-fix#cREKK45QUPfB05RH.99

8. Lessons from history Overall, the weight of the existing historical evidence suggests that patent policies, which grant strong intellectual property rights to early generations of inventors, may discourage innovation. On the contrary, policies that encourage the diffusion of ideas and modify patent laws to facilitate entry and encourage competition may be an effective mechanism to encourage innovation. Petra Moser, Patents and Innovation: Evidence from Economic History, Journal of Economic Perspectives—Volume 27, Number 1—Winter 2013—Pages 23–44.

9. Patents and innovation …nations with patent systems were not more innovative that nations without patents systems. Similarly, nations with longer patent terms were no more innovative than nations with shorter patent terms. James Bessen and Michael Meurer (2008), Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk, Princeton University Express, Princeton and Oxford. , p. 80.

10. IP & innovation Indeed, the historical evidence provides little or no support for the view that intellectual monopoly is an effective method of increasing innovation. M. Boldrin and D. Levine: Against Intellectual Monopoly, chapter 8, found at http://levine.sscnet.ucla.edu/papers/ip.ch.8.m1004.pdf, at 2.2007.

11. Empirical evidence: IP & development Survey of patent laws in over sixty countries: strengthening of patent rights resulted in an increase in filings from foreign applicants, with no effect on filings by local inventors. Lerner J ‘Patent Protection and Innovation Over 150 Years’ (2002) http://www.epip.eu/papers/20030424/epip/papers/cd/papers_speakers/Lerner_Paper_EPIP_210403.pdf (Professor, Harvard Business School)

12. Patents & industrial innovation ‘…as economic studies have shown repeatedly, patents do not play a particularly important role in most fields of industrial innovation’ Scherer, F.M. (2009), Journal on Telecomm. & High Tech. L. Vol. 7

13. Joseph Stiglitz on patents …are the incentives provided by the patent system appropriate…? Sadly, the answer is a resounding “no.” ‘Prizes, not patents’ (3.3.07), http://www.project-syndicate.org/commentary/prizes--not-patents

14. Richard Posner In most [industries], the cost of invention is low; or just being first confers a durable competitive advantage… so there's no point to a patent monopoly that will last 20 years… Most industries could get along fine without patent protection (2012)

15. Who benefits from an increase in IP protection ’an increase in intellectual property rights in a country which is a net importer of technology is ‘likely to benefit overseas rights holders disproportionately compared with domestic rights holders’. Productivity  Commission  2012,  Trade  &  Assistance  Review  2010-11,  Annual  Report  Series,  Canberra, p. 100.

16. Abolishing patents? In general, public policy should aim to decrease patent monopolies grad ally but surely, and the ultimate goal should be the abolition of patents. After six decades of further study since Machlup’s testimony in 1958 has failed to find evidence that patents promote the common good, it is surely time to reassess his conclusion that it would be irresponsible to abolish the patent system. The Case Against Patents, Michele Boldrin and David K. Levine, Journal of Economic Perspectives—Volume 27, Number 1—Winter 2013—Pages 3–22

17. Impact of TRIPS on R&D in India …little has changed to dispute the conventional wisdom that the developing countries should not grant products patent protection. They are already paying the cost of high prices of patent protected products. But the technological benefits claimed have not yet taken place…. None 'new chemical entity' ( CE) has yet been developed for marketing. Sunil Mani and Richard Nelson, TRIPS Compliance, National Patent Regimes and Innovation Evidence and Experience from Developing Countries, Edward Elgar, 2013, p. 12.

18. India-pharmaceuticals TRIPS may have accelerated R&D related to improvement of medicines, but ‘in the absence of TRIPS, such activities would still have been undertaken. With larger domestic operations, Indian companies…would have had access to larger resources and would have been better placed to undertake such research (p. 108) • S Mani & R Nelson, TRIPS compliance national patent regimes and innovation. Evidence and experience from developing countries, Edward Elgar, 2013.

19. Context dependence

20. Industrialization stages and IP

21. From imitation to innovation Once the country’s technological ability is above a certain threshold, the imitation effect is dominated by the innovation effect, and the optimal protection of IPRs increases with the levels of development. Intellectual property rights and innovation in developing countries Yongmin Chen and Thitima Puttitanun, Journal of Development Economics 78 (2005) 474 – 493

22. Lessons from history: USA “…When the United States was still a relatively young and developing country, for example, it refused to respect international intellectual property rights on the grounds that it was freely entitled to foreign works to further its social and economic development.” U.S. Congress, Office of Technology Assessment, Intellectual Property Rights in an Age of Electronics and Information, OTA-CIT-302, Washington, DC: U.S. Government Printing Office, April 1986).

23. Article 66.1 of the TRIPS Agreement • ’In view of the special needs and requirements of least-developed country Members, their economic, financial and administrative constraints, and their need for flexibility to create a viable technological base, such Members shall not be required to apply the provisions of this Agreement…’