# **_Patent asymmetry_**<sup>**_26_**</sup>

Proponents of IPRs recall that without industrial applicability and retribution there is little incentive for individuals and companies to pursue research and development activities, while weak protection deters investors in high R&D sectors. Critics of IPRs argue that intellectual property rights prevent the diffusion of new technologies, increase the cost of R&D, thus adversely impacting on R&D and productivity.

The crucial issue in respect of IP is therefore to what extent it promotes or hinders access to technologies that are required for their development, and how the current patent system can be exploited to accommodate the needs and interests of developing countries. It has been concluded that in most low income countries, with a weak scientific and technological infrastructure, IP protection at the levels mandated by TRIPS is not a significant determinant of growth. On the contrary, rapid growth is more often associated with weaker IP protection. In technologically advanced developing countries, there is some evidence that IP protection becomes important at a certain stage of development, but that stage is not until a country is well into the category of upper middle income developing countries.

The question is how can developing countries adapt their needs to exploit to their advantage the current patent system? One possibility is a greater exploitation of utility models / petty patents for innovations coming from developing countries: they offer a lower level of protection than standard patents, but are more easily obtained and target a lower level of inventiveness. Evidence (Japan, Brazil, Philippines) has suggested that utility models are more important than patents in stimulating productivity growth. Nevertheless, there are indications that interest amongst companies in the utility model is rather low.

In developing countries, one of the most important sources of innovation is local or indigenous knowledge. However, the difficulty is to locate, document and protect local and traditional knowledge. Also, without proof or written record of ownership, which in developing countries is often difficult to ascertain, it is impossible to place a patent claim on knowledge. A functioning legal framework, which goes beyond TRIPS and is adapted to the protection of indigenous, local and traditional knowledge in developing countries, is lacking.

IPRs are not adapted to the needs of protection required by indigenous knowledge, but such protection is vital for developing countries. Patents provide intellectual property protection for the invention of the company enabling investors to regain funds they risked for R&D, if and when a product is commercialized. Companies or investors will not risk capital to discover or develop a drug unless their investment is protected from competing companies by a patent. The same applies to local communities. In the absence of protection, few farmers or traditional healers would run the risk of losing retribution for their knowledge. As a consequence traditional knowledge and innovation in developing countries have been surrounded by much secrecy further impeding the enlargement of the knowledge base.

> 26 This section is largely based on the UK CIPR report (UK Commission on Intellectual Property Rights): Integrating Intellectual Property Rights and Development Policy 2002.

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