Developing Countries Perception on the TRIPs Agreement - Research Paper Example

Running Head: Developing countries’ Perception on the TRIPs Agreement Name: Institution: Course: Tutor: Date due: Abstract Several proposals have been submitted since the TRIPS Agreement was put into use, requesting for it to be reviewed. Some of the proposals belong to the "in-built agenda" (UNCTAD, 1999), that is, issues relating to geographical indications (article 23.4), the patentability of biological inventions (article 27.3.b) and to "non-violation" cases (article 64). Developing countries have made proposals in the areas of, patents, plant varieties and geographical indications, with an aim of expanding protection. The TRIPs Agreement was negotiated among developing and developed countries, where developed countries were prompted by on the argument that, an expanded and amplified protection of IPRs that would bring about increased generation of foreign direct investment (FDI) and transfer of technology to developing countries, and change in IPRs that would also stimulate local innovation. Though the Agreement is still not in force, serious doubts about the extent to which such positive effects may take place have been raised. On this matter the African Group has proposed that the appraisal mandated by article 27.3.b) relates to the substance, and not merely the "execution" of the provision. It also holds that the execution deadline should be extended to take place five years after the completion of the substantive appraisal of Article 27.3(b) that would allow developing countries to set up the necessary infrastructure required in the implementation of the Agreement (Vasudeva, 2004). Introduction The Trade-Related Aspects of Intellectual property Rights (TRIP) agreement was negotiated in 1986 at Uruguay under the patronage of the general Agreement on tariffs and trade (Maria 2000). In 1986 the institutional predecessor of the World Trade Organization (WTO) incorporated substantial and uniform protections of Intellectual Property Rights (IPRs) into the international trade system. Some years back, the United States (US) has pursued a number of bilateral and regional Free Trade Agreements (FTAs) in different parts of the world. These Agreements included the North American Free Trade Agreement (NAFTA) and the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR), looked at as distinct feature pertaining the bilateral agreements that go beyond the multilateral principles on IPRs imposed by the TRIPS agreement. The TRIP Agreement came into effect on January 1995, at that time it is seen as the satisfactory multilateral agreement on intellectual property. Protection of intellectual property was provided under the Agreement, the fundamental obligation to all member countries is to accord the required treatment as per the agreement. Article 1.3 defines who the persons are; it includes persons who are natural or legal, and those who are closely attachment to other Members without necessarily being nationals. In intellectual property conventions of WIPO that had existed before, the criteria for determining which persons must benefit from conditions provided for under the Agreement are laid down, and they are applicable to all WTO Members. The conventions referred to are, Paris Convention, Berne Convention, International Convention for the security of performers, Producers of Phonograms and Broadcasting Organizations also called the (Rome Convention) and the Treaty on Intellectual Property in Respect of Integrated Circuits (IPIC Treaty) (Ortino & Ernst, 2004). Statement of the problem Developing countries have called for attention concerning the TRIPS Agreement on the transfer of technology. These countries have observed that, there is continued growth of the technological gap between the North-South since the adoption of the Agreement. There are also fears by developing countries, that the enhanced security given to IPRs will not efficiently encourage the development process, but will limit the access to technology instead (Daniel & James, 2002). Objectives 1 To determine if TRIPS Agreement has prevented developing countries from becoming technologically independent 2. To know if developing countries have benefited from the TRIPS Agreement 3 To determine whether the TRIPS Agreement has led to growth in trade or reduction in trade between developed and developing countries. Methodology This was mainly cantered on the idea of the TRIPS Agreement on developing countries, as far as international trade and technology are concerned. The countries studied were African countries and India. Transfer of Technology Developing countries have uttered their concerns about the access to technology, where these countries feel that the acquisition technology from commercial sources has become difficult for them. The WTO agreements provide very little support to effectively facilitate and uphold the access to technology. The important of developing countries to being disturbed is that, developing countries must increase and improve their intellectual property regimes as per the agreement. The facilities to improve science and technology which were allocated led to an imbalance in the North-South regions. The growing insight is that, the benefits of superior intellectual property security may be unequally distributed. Even when all developing countries are obliged to bear its transactions costs in the short and medium terms. World Research and Development (R&D) expenses are also asymmetrically distributed. Recent estimates show that developing countries are only accountable for about 4 per cent of global R&D expenses. These expenditures are greatly concentrated in a few countries and firms, with the apparent "globalization" of R&D activities creating some expectations of the ability of R&D to transfer the expenditure to developing countries, with decentralization of R&D majorly taking place in other developed countries.           Through strategic alliances large firms of developed countries have developed a sophisticated network of support in technology that has made them more dominant carrying out the role of technology generation and use. Technology which is still changing with increasing profitability has increasingly become more difficult to be obtained, mature technologies are comparatively easy to acquire. When developing countries reach higher levels of development in technology, they will have a more complex demand for premature technologies. A decline in the contractual or non-equity technology transfer modes, has been observed through internalized forms of technology transfer, for instance, the modes of transferring technology which being undertaken in the firms are likely to be favored by technology owners. When there is a rapid adjustment in technology the potential recipient cause competitive threats of being future competitors in the world markets (Maria 2000). Bio-piracy Corporations originating from the developed countries continue to The TRIPS Agreement don’t have a guarantee to give the communities powers to control their natural resources, also TRIPS Agreement does not give a community’s the powers to own the resources it has nurtured for along time. Theft of indigenous knowledge was guarded by the Convention on Biological Diversity. There is no relationship between TRIPS and the CBD. Patent and profit from the indigenous communities across Africa, thus this disagreement must be resolved and other considerations done. The African countries have also proposed that the fact of plants, animals, and micro-organisms plus their parts, and natural process that produce them should not be patented. These countries requested that this should be made clear during review. They have also suggested for the incorporation in Article 27.3(b) that any sui-generis law for plant variety protection can provide for: i. The safety of innovations of native and confined farming communities in developing countries, who depend on the Convention on Biological Diversity, and the Convention of International Undertaking on Plant Genetic Resources; ii. the prolongation of the traditional farming methods, by giving the farmers the right to exchange and keep seeds, and the right to trade their harvest; iii. denying the rights that are not competitive or practices which will hamper people in developing countries from food control in Article 31 of the TRIPS Agreement (Pires, 2011) Health and Pharmaceuticals High economic and social expenses for developing countries and peoples in Africa have been caused by patents on pharmaceuticals. Basing on the Doha Declaration which states that, TRIPs had incorporated mechanisms planned to protect public health, while respecting intellectual property rights. There are acknowledged disputes on the need to increased access to medicines in poor countries. To maximize on profits manufacturers of drugs have used the TRIPs Agreement in branding and patenting their drugs, which has resulted to many people who failing to buy the expensive patented drugs which made them to suffer, and this was been realized by WTO members, mostly in developing countries especially the disaster of HIV/ AIDS, Malaria and Tuberculosis, advocated for in the Doha Ministerial Conference of November 2001 aimed at stopping certain provisions in the TRIPS Agreement to address problems of Public Health experienced by developing countries. The agreement Provides for compulsory licensing, where the government or court grants permission to any person to produce a standard version of a patented product, the patent holder is rewarded through royalties from sales; and the importation of a branded and patented product with no the endorsement of the patent holder (parallel import). This license is only granted under certain conditions. Results a) Patents In the field patents, countries that are have members have the freedom to decide on the following aspects: the commercial purposes are provided for as an exemption for trial use of an invention; the organization of compulsory licenses on a variety of grounds; the permissibility of developments on patents; the protection of slight innovations through useful models; the definition of the extent of claims and of non-literal breach; The framework of the offered rules of the TRIPS Agreement entailed the aspects mentioned above concerning legislation. By reviewing the agreement, the consequence of some provisions on technology development and transfer, may be improved. For instance, they should include an explicit recognition of “defiance to deal” as a ground for essential license. Article 31: (g) the reasons that justified its granting have ceased to exist, therefore, there is no need of the content to be revised, as the obligation to terminate a compulsory license, if literally applied, may constitute a strong discouragement to request a compulsory license and, in fact, undermine the whole compulsory licensing system (Peter, 2007). b) Limited Business Practices            Application of competition rules to limited business practices in voluntary licensing is permitted in Article 40 of the TRIPS Agreement. Some examples of limited business practices that are given are; exclusive grant-back conditions, and conditions that prevent testing of the validity and coercive package licensing. Article 40 was to limit the likely ways in which Member countries might control their business practices, mainly hindering developing countries from using a development experiment to judge the restrictive practices. This was proposed during the discussions about an International instrument of conduct on transfer of technology that was not successful. The article of positive comity gives the Member the responsibility to consider the requests for consultations required by another Member. This Member determines the accomplishment to be taken by to when a request has been addressed, because he has the freedom to choose. The rules involving business practices that are restricted in licensing agreements may call for future discussions about their clarification and development. The proposal did not generate an international policy on transfer of technology in December 1980, but the principles that are multilaterally equitable were approved. The UN General Assembly took control of the restrictive business practices. The principles apply to all dealings involving goods and services plus all enterprises except agreements between governments. The issues entailing the abuse of market authority through practices such as, biased pricing, joint ventures and other forms of control, are addressed by the price-fixing agreements, collusive tendering, and market or customer allocation agreements, which are horizontal restraints dealt with by the Set. The Review Conference that was convened in 1985 had a major objective of improving the Set to an instrument that will bind the Intergovernmental Group of Experts to a “committee”. This has dynamically been promoted by developing countries, although the initiatives were not successful. At the five-yearly review conferences developed countries repeatedly turned down the efforts made by developing countries to make the legal international binding instrument. c) Technological Transfer to (Least Developed Countries)            In article 66.2, the developed Member countries are required to offer incentives in their legislation of enterprises and institutions in their territories intended to promote and encourage technology to be transferred to least developed countries. The issue of reviewing the implementation of article 66.2 and the circulation of a questionnaire about the matter in an informal document of the Council, for was TRIPs, was approved to be addressed, in the meeting that was held on September 1998. In article 66.2 of the agreement, future negotiations were made about the provision with an aim of specifying the obligations of developed countries. Tangible and feasible technological foundation are made through sharing of technology that is not an hazard to the environment and other similar technologies that contribute to development, for example; technology for quality control and excellent manufacturing practices were also discussed. LDCs may review other WTO agreements like, Agreement on Subsidies and Countervailing dealings so as to facilitate compliance with article 66.2 (Walker, 2001) d) Technical Assistance          Article 67 in the TRIPS Agreement, has no specific obligations or operative mechanisms on Supply of technical and financial support to developing and least developed countries. An appeal which focused on jointly approved provisions and conditions was made so as to provide for assistance. The cooperation shall include support in making laws and regulations on the security of IPRS as well as on the preclusion of their abuse. The training of staff was supposed to be done at established and strengthened residence offices. On many occasions the council for TRIPs has reviewed information on support provided to developing countries and least developed countries, included by intergovernmental organizations. The agenda of the TRIPS Agreement in future discussions may aim at further specifying the obligations found in this article. e) Technology on Environment           In the WTO rules address the issue of transmission of Environmentally Sound Technology (EST). The necessity for a favorable access to, and transfer of EST, particularly to developing countries, which includes concessional and preferential terms, is recognized in Chapter 34 of Agenda 21. Ways to employ so as to support and promote the accessibility and the use of EST have been incorporated. Still in Chapter 34, there are detailed provisions on the clear justification and purposes of these provisions, but the rules have not properly been implemented. Furthermore, the power of private parties to management of the use and eventual transfer of ESTs and the strengthening of IPRs in agreement to the TRIPS Agreement has been reinforced. The TRIPS Agreement addressed the issue on standards for protection of patents through the “undisclosed information" where title-holders may maintain the technologies they own, if other people are permitted to use their technologies they are charged high royalties. Multilateral Environment Agreements (MEAs) was given obligations to do away with the utilization of certain substances or technologies. The patent holder has the power to own the technologies, despite of some measures to support developing countries in that process. Likewise, there are standards adopted at the national level that prohibit imports that are not compliant with some of the environmental requirements. In this case the lack of access to alternative EST yields an additional barrier to exports from developing countries, for example  the issue of a substitute to chlorofluorocarbons (CFCs). In relation to this, India has found difficulties to access the HFC 134 A, the technology which is considered as the best, and available to replace certain CFCs. The companies which own of the technology are reluctant to transfer it without greater part of control over the ownership of the recipient Indian company, because they are enclosed by patents and trade secrets. The United States provide limited access to technologies developed for public support by people from developing countries. With point of reference to the law of the United States, exceptional licenses cannot be approved unless the licensee accepts that any product relating to the creation or production relating to the use of the novelty will mainly be manufactured in the United States (Nuno, 2010). The council on governmental relations gives a provision for universities to be very careful while dealing with foreign licensee on transfer of university research and technology improvement, particularly for the researches funded by the United States Government.          Compulsory licenses based on environmental protection, are should be specific in national legislation as recommended by Agenda 21. The measures, however, may be inadequate to guarantee the transfer of EST, as needed by developing countries India made a proposal concerning trade and the environment at the WTO Committee, according to the proposals, there is need for review of the TRIPS Agreement, in order to essentially promote the transfer and use of ESTs. Competitiveness and Growth The difficulty of making specific claims on possible impacts of the TRIPS Agreement on prices, production, innovation, technology transfer and diffusion of FDI is by now clear. In predicting the impact of that the agreement has had on international competitiveness and growth performance in developing countries has both the positive and negative sides. if TRIPS induces international trade in IPR sensitive industrial inputs, developing countries will benefit from the TRIPS Agreement, in that, the trade will embody rising amounts of technology and have a cost reducing impact that will offsets associated price increases. Further, to the an extent that stronger IPRs will provide better incentives for additional formal technology transfer through FDI and licensing contracts, which will result to a better impact on trade. Since the execution of the TRIPS agreement, developing countries have not benefited, in that; the agreement has resulted to developing countries experiencing an increase in prices of imports, although the price increase can be regulated by the market structure effect. Stronger IPRS will directly slow down technology transfer through legitimate imitation and illegitimate copying. The effects of the TRIPS Agreement will vary across the countries. Beneficial impacts are most likely in the recently industrialized countries that have developed strong industrial and technological bases that will be increasingly applied to technical innovation. Moreover, the most developing countries have deeper market structure that will help blunt any anti- competitive results of the TRIPS Agreement. However, in those nations in which technological development is at an undeveloped stage, with humble technological transfer and diffusion, having little in terms of offsetting local innovation, there could be net costs, even over the long term. The position of developing countries can be improved internationally, where developing countries are given the initiative of participating in assistance plan offered by several organizations. This is an advantage to firms, and governments of developed countries. Conclusion The process of attaining and absorbing the technology is complex; therefore it must be reviewed in the TRIPS Agreement and in the composition of several WTO Agreements. The WTO agreements mainly deal with governmental practices. Technology outside the public domain is under the property rights of private or public entities. Some WTO agreements need improvement or they should be supplemented, because they provide a narrow framework that broadly deals with the complex matters that are raised concerning the transmission of technology. In the context of unequal approach in development and transmission of technology issues, in addition to the TRIPS Agreement, other WTO agreements for example Trade-Related Investment Measures (TRIM) and Subsidies and Countervailing Measures (SCM) Agreements may be considered (Carlos 2000).             Technology is vital in the establishment of health competitive and in the laying of development strategies. The creation of technology is privately held and overwhelmingly concentrated in developed countries.            Developing countries were reluctant in accepting the entry into discussions of an agreement on IPRs. Their concerns were particularly with respect to accessibility to technologies essential for development, which were dismissed at that time. The proponents of a global agreement, whose probable benefits for developing countries, were in terms of improved flows of resources and technology, which do not seem to happen. The capacity of technology owners to control the use of their indefinable assets of intellectual property rights is reinforced, including the issue of whether to transmission to other people or not; this has been strengthened and expanded by developed countries. Foreign countries have limited accessibility to technologies developed for public funding. Developing countries are cautiously approaching possible negotiations on the TRIPS Agreement, they are eager to review the TRIPS Agreement than the developed countries. The proposal of developing countries generally aims at balancing the agreement, and not at questioning its basic foundations, with an exceptional of the case presented by the countries from Africa on the patentability of living matter. The main function of host countries is that, technological transfer within WTO must address the strong linkages connecting the transmission of technology and local capacity building. The improvement of accessibility and effective use of new technologies will need an extensive approach which will go beyond the Agreement. Thus the developing countries are justified for perceiving the TRIP agreement as a way of preventing developing countries from becoming technologically independent. The benefits mostly resulting from higher standards of protection will not be realized right away and their magnitude depends on the intensity and value of the protection ultimately adopted. The TRIPS level will produce fewer benefits. TRIPS level should be sufficiently be simulative to make differences particularly for international trade flows and associated activity, for local companies which must function largely within the local setting for the organization of their technology as well as its development, production and commercialization, a higher level of protection would be more encouraging. On most developing countries, the TRIPS Agreement appears to have negative effects will be felt shortly (one or two years) and increasingly positive effects, as local industries and individuals start to realize the possible benefits. Naturally conditions such as inflation, taxation, tariffs and other macro-economic policies will dominate private decision making and the performance of the judicial system will have a major influence. Recommendations To facilitate World trade, negotiation of member states on definite commitments, relating to the reinforcement of their domestic services, effectiveness and competitiveness, and access to technology on business basis must be done. Article IV.2, gives developed countries the duty to establish contact points to assist in accessibility to information, which entails the availability of technological services.             In future negotiations and strategy and measures in (article XIX.3) should be given suitable attention to the referred provision, in order to make it operative. The acceptability of subsidies conferred in developed countries in relation to technology (including equipment) to developing countries, may also be considered, in order to implement article 66.2 of the TRIPs Agreement (Justine & Lawson, 2008). The condition of each country’s current intellectual property system, will affect the beneficial degree of technical assistance to developing countries. Some countries will require more assistance than others. Most of the benefits will relay on the suggested cost reduction measures, for example implementation of the reference system for patents. Some resistance may emerge from small countries to aid offered by large countries, because the small countries fear being dominated by the donors, and prefer aid from multilateral institutions. Acknowledgements My gratitude goes to my family and friends who gave me the necessary support that made my research a success. References Carlos, M. (2000). Intellectual Property Rights, the WTO, and Developing Countries: the TRIPS, London: Zed Books. Daniel, L., & James, D. (2002). The Political Economy of International Trade Law:Essays in honour of Robert... New York: Cambridge University Press. Justine, M., & Lawson, C. (2008). Interpreting and implementing the TRIPS agreement:is it fair? UK: Edward Elgar. Maria, C. (2000). Property Rights, the WTO, and Developing Countries: the TRIPS intellectual Property under WTO Rules. Cheltenham: Edward Elgar. Nuno, P. (2010). The TRIPS Regime of Patent Rights. Netherlands: luwer law International. Ortino, F., & Ernst, P. (2004). The WTO Dispute Settlement System, 1995-2003. Netherlands: Klawer Law International. Peter, Y. (2007). Intellectual Property and Information Wealth:International Intellectual.. Westport: Preager Publishers . Pires, N. (2011). The TRIPS regime of Trademarks and Designs. Netherlands: Kluwer Law International. Vasudeva, P. (2004). India and World Trade Organization:Planning and Development. New Delhi: A.P.H. Publishing Corporation. Walker, S. (2001). The TRIPS Agreement, Sustainable Development and the Public Interest. Swizerland: Center for International Environmental Law, International. Read More