Intellectual Property Rights and Developing Countries - Term Paper Example

IPR AND DEVELOPING COUNTRIES Semester Year As per this study, intellectual property is a right that facilitates development of image or goodwill. There are patents given to specific services or products in order to protect their invention. In real world scenario intellectual property rights is all about enhancing economic development. It has been observed that there are significant differences between developed and developing countries. Economic factors prevalent in developing countries are highly distinguishable from that of developed countries. This study not only encompasses positive aspects of IPRs but also takes into consideration its negative components. The major aim of this study is to outline current trends between intellectual property and developing countries. There are wide array of international agreements linked with IPR and this has an impact on developing economies. The study even states that provision should be made where developing countries will be given free accessibility to intellectual property. It would enable developing countries to be at par with developed countries. Introduction Background Intellectual property can be defined as the law that mainly deals with the intangible things such as the creation and the development of goodwill. The intangible things mainly include safeguarding the copyright and the patents for invention that is marked to the goods and services for identifying the goods and services. The developing countries mainly face the problem in implementing the intellectual property is the fear of adopting the intellectual property which has lead to the increase in the price of the goods particularly in case of medicine. The implementation of the intellectual property is considered as the important factor for the economic development of the country as it assist in the promotion and encouragement of the foreign direct investment and the domestic innovation which facilitates the economy in assessing the technology of the private sector. But the foreign direct investment will affect the domestic market and the domestic product of the country. The intellectual property generally creates and develops a framework in which the developing countries mainly participate towards the conduct of the economic activities of the developed countries of the world. The government of the developing countries mainly faces problem in utilizing the resources of the country towards the strengthening and developing of the intellectual property system. Development and the implementation of the intellectual property in the developing countries mainly promotes towards the development of the export of the developing countries of the world. Intellectual property provides protection of the goods and services of the developing countries which will affect the interest of the countries. The main issues relating to the current and the future prospect of the developing countries is the conflict in establishing relationship in promoting intellectual property rights and the promotion of competition in the economy which has created an issue in the domestic and international market of the developing countries in the recent years. The main problem that is faced by the developing countries is adopting the changes or developments in accordance with the intellectual property since the market of the developing countries are very small. The intellectual property emphasizes on the research and development in the developing countries and encourages the change in the technology which is a costly affair for the developing countries and the main problem that is faced is in case of the pharmaceutical sectors. But the adoption of the intellectual property is beneficial for the economy of the developing countries since it will attract the research and development of the foreign direct investment and providing the incentive for conducting the research of the specific diseases in case of the developing countries. The intellectual property facilitates towards the promotion of the international trade for the transfer of goods that are not produced in the developing countries which in long term will affect the economy and the implementation of the intellectual property on the goods of the developing countries will lead to the increase in the price of the goods that will affect the economy and will provide unexpected gains to the developed countries of the world. Thesis Statement The thesis statement of the study is the current issues and prospects of the intellectual property and the developing countries. Theory & Literature Review It is widely understood and appreciated fact that broad and quick diffusion of new and superior knowledge is beneficial for social well being. According to Barton, et al., Efficiency and growth are two terms that are very closely related with how quickly new knowledge and new technologies are spread (Abbott, Correa, Drexl, Foray, and Marchant, 2007). If greater no. of individuals, firms or countries have access to superior technologies, products and processes then it is quite obvious that benefits will be more widespread rather than remaining confined too few sections of people. However, it is also understood that rapid spread of the knowledge of new technology can be bad for innovation. The reason is quite clear a firm which spends a lot of time and money to innovate something it will obviously want to make profit out of the new product. It will not like the fact that other firms share the fruits of its investment quickly. According to Schneider who examined the impact of high technology trade on the rate of innovation and growth of a country, states in his study high technology imports are important in explaining domestic innovation both in the developed and developing countries (Schneider, 2005). The impact of foreign technology is stronger on the domestic GDP than the impact that is exerted by domestic technology. The rate of innovation is also positively impacted by IPRs. However the effect is more pronounced in case off developed countries rather than the case of developing countries. The research is inconclusive on the matters of FDI. According to Pineda who in his paper accesses the impact of stronger intellectual property rights on the issues of science and technology in developing countries says that the global trends towards stronger intellectual property rights regime have moved forward in different dimensions (Forero-Pineda, 2006). The researcher argues that the trend towards stronger protection of intellectual property rights has shifted from developed to developing countries. Soon after Second World War United nations there were several studies and analysis done which centered on technology transfer issues concluded that developed and developing countries should take different stance on technology transfer issues. The presence of monopoly and oligopoly in world technology markets resulted in prevention of developing countries from having fair access to technology. According to Hoecman, Maskus and Saggi in their paper transfer of technology to developing countries they analyze national international policy options in order to encourage international transfer of technology (Hoekman, Maskus, and Saggi, 2005). The paper distinguishes between different forms of technology transfer such as trade involving knowledge and technology, trade involving products, FDI and international intra-national movement of people. The researchers state that international technology transfer is highly important keeping in mind the fact that ITT helps in economic development. Developing countries have long sought help to use ITT and stimulate the same. However, on the other hand the owners are hell bent on the fact that they would not allow transfer of technology unless they are adequately compensated or in other words adequately rewarded for the effort that they have put in terms of the time and money in product development. One of the processes in which technology is transferred is through trade in goods. Technology change occurs due to creation of new products and processes results in economic development. New products are associated with new ideas and international trade helps in transferring knowledge from one country to another. Barriers to international trade causes the difference in per capita income in between countries as the developing countries most often do not have access to new technologies. According to Steinmueller ability to imitate or reciprocate new technologies in recent years has been limited by the existence of IPRs or intellectual property rights (Steinmueller, 2001). The intellectual property rights which are normally created due to international conventions are generally created to make innovation profitable and encourage innovation. Another function is to promote market exchange of technological knowledge. However the conventions may also be used to block access to new technologies. The potential user of technology which helps him to produce the goods at lower cost should be able and pay to the creator of the technology a license fee for using the product and benefitting from it. However the creator of the new technology may not be willing to sell the same as it may wish to maintain their costs at the lowest level or may wish to keep a monopoly position in the market. So the creator of the technology may not be willing to come to the negotiation table. According to Raney who investigated on the impact of transgendered crops in developing countries, state the farmers in developing countries can benefit from transgendered crops. However the fact remains that national help is required so that IPR can be effectively managed and the farmers can have easy access to the improved variety (Raney, 2006). General Intellectual Property Issues Common issues that arise in intellectual property matters relates to the fact that how much compensation should the creator new technologies demand. It is a common fact and common knowledge that economic growth arises due to the fact that newer technologies are adopted by the different countries. In fact the development index of a country and per capita income is actually related to the presence of these new technologies in different sectors. The developing countries should have a better access to new technology especially in certain areas such as life saving drugs. However, the intellectual property rights is necessary to be implemented as it should provide incentive for the companies that invest time, money and effort to actually do that so that they are rewarded financially for their investment. So the debate primarily focuses on the fact that what price should the innovators charge which is legitimate and serves both the purpose that is it serves the purpose of the innovators and incentivizes then to conduct research and serves the purpose of the developing countries affordability. However there may be another issue that may arise. That is the innovator or the intellectual property creator may not be willing to sell his innovation as the innovator may not be willing to part with his innovation as he or she might be willing to maintain the monopoly position that it will be having through the technology so that the cost advantage that it has gained through the use of the new technology after so much amount invested in research may not be lost to others. The innovators may wish that the investment that they have made in innovating the new product may be harnesses by the company itself for the financial benefits and may not want that the technological benefit and the cost benefit that it has achieved through the hard work, time and cost should not be available for free by other companies so that they may not be able to reap free benefits from the innovations that the original companies have invested so much money and effort in acquiring. International Treaties and Agreements on Intellectual Property The reforms that occur in the IPR is designated by the trade economist as a measure to increase the imitation costs reduction in the access to global information and place the firms in the developing countries to be at disadvantageous position with those of the developed countries. Over the last two decades there has ushered a theatrical transform in the global surroundings that aims to protect intellectual rights. Until recently, nations did enjoy extensive monopoly in the adoption and implementation of domestic intellectual property so that it suits their competitive advantage that is in innovation or imitation. The earlier conventions that governed intellectual property rights included Paris convention for the protection of intellectual property and Bernie convention for copyrights (Sell, 2002). These conventions only set minimum guidelines and standards that the signatories had to follow. In 1994 came the TRIPS convention or the Trade related aspects of intellectual property rights. This TRIPS convention ushered in a new era. The Trips convention extended the global reach of intellectual property regulation. The convention is based on protest and exclusion rather than dissemination and competition. In an exception to the earlier convention, TRIPS does not only limit the range of government policies that the governments may carry out. TRIPS were originally designed to help the developing countries so that they may compete at par with the developed countries in matters of technology. Developing countries always witnesses major challenges in the form of investment and accomplishment of long term goals. IPR is mainly associated with knowledge and technology. It has been observed that developing countries are not provided with that power essential for gaining competitive advantage. TRIPS convention focused on eliminating any form of policies that restricts growth of developing countries. This convention highlighted certain features that provided developing countries with additional power. Technological advancements are a common platform that should be provided both to developing and developed countries. On the other hand, this trade centered convention does not encompass any government norms reducing scope of biasness. Intellectual Property Rights and International Business Intellectual property rights are an important issue especially for international businesses. The intellectual property rights and treaties and agreements in this regard provide incentive for the large and international firms to indulge in research and development so that they can implement new technology. The incentive to design new technology for the international business is dual fold. One is that they can benefit from the new technology by reducing their production costs so that they can maximize the profit. Second benefit that they can have is that they can sell the technology if they want so that they can earn their profits from the technology transfer license. However the major incentive for the innovator or the builder of new technology is to protect the intellectual property so that they can retain an absolute monopoly influence on the market and can earn maximum profit. The worst sufferers of the intellectual property rights are the poor and developing countries who do not have the money, ability and the leadership so that they can develop technologically advanced products which they can sell for a premium under the intellectual property rights adoption. However the situation is changing slowly as the developing countries have now state of the art technological advantage in certain sectors which they can use to gain access to the IPR market and be benefitted from it. Several models have been developed in this regard that analyzers the mechanism under which stronger IPR protection may actually help the companies in the developing countries so that they may break into the export market (Yang, and Maskus, 2009). One of the essential use of the IPR rights is to case a reduction in the cost of technology transfer. Empirical evidence supports the fact that multinational firms helps expand technology flows through greater use of FDI and licensing so that local patent rights are improved. Developing countries Necessities in Intellectual Property Consequences of Intellectual Property Rights implementation on developing countries World trade organization made it compulsory for the developing nations to abide by TRIPS or in other words trade related prospects of intellectual property rights. Subsequently the developing countries have decided to sign on the agreement. However the questions that remain are regarding the economic implication of the adoption of TRIPS by the developing countries. The main debate has focused around IPR and the concerns that have been raised around it. The debate has focused on the issue that this legislation will only help the rich and technologically advanced countries. The argument that has been put forward in support is the fact that developing countries are not that technologically advanced and cannot access the benefits that the TRIPS allows the innovator and developer of new technologies (Lesser, 2001). This is evident from the fact that the no. of patents filed from the developing countries is much smaller in no. than the no. of patents that are filed by the developed countries. In other words IPRs are designed to protect the monopolies or the developed countries and their dominance in the technology market and the exploitation of the developing countries importers. Developing countries should have free access to Intellectual Property Debate on the Intellectual property rights often focuses on the fact that should the intellectual property be allowed to flow free to the developing countries or should the developer of the technology be adequately reported. The point of discussion particularly focuses on the fact that the companies which invest their time effort and money want that they should be adequately rewarded for the investment that they make in terms of license fee. However the issue becomes a problematic one especially when considering the matters of important life saving drugs of GMO crops. Intellectual property right may also cause a hindrance in the free flow of scientific knowledge. IPR has a negative effect on the transfer of scientific knowledge (Murray, & Stern, 2007). Conclusion As per this study, intellectual property and rights mainly deals in protection of goodwill. Intellectual property is usually developed to enhance economic development. This form of development is initiated through encouraging foreign direct investment and domestic innovation to access technology. Intellectual property basically creates a framework where developing countries can come in connect with developed countries in terms of economic activities. There are current trends observed in developing region’s intellectual property. New technologies basically facilitate economic growth and development in developing countries. Intellectual property rights are a medium through which companies can earn desirable incentives for investing effort, money and time. Domestic intellectual property till many years was easily accessible and this was due to monopoly market conditions. However intellectual property rights associated with trade created a new era in this particular field. The regulation effectively expanded across global markets. TRIPS convention was basically inclined towards eliminating government policies and incorporating unbiased strategies. This convention aimed at designed a platform where developing countries can operate at equal par with developed countries. Developing countries are the ones who suffer in context of intellectual property rights since they do not possess sufficient funds to invest in technologically advanced products. In current scenario these countries have acquired technological advantage and this shall support to access intellectual property rights markets. IPRs are usually framed to eradicate dominance of developed countries over developing countries. To certain extent restriction in flow of scientific knowledge occurs mainly due to intellectual property. Negative impact of this aspect is observed in many scenarios. References Abbott, F. M., Correa, C. M., Drexl, J., Foray, D., & Marchant, R. (2007). Views on the Future of the Intellectual Property System (No. 1). International Centre for Trade and Sustainable Development. Damson, P., Wang, Y. and Wang, L.(2005).The Impact of Price Regulation on the Launch Delay of New Drugs, Journal of Health Economics, 14(3), pp: 69-92. Forero-Pineda, C. (2006). The impact of stronger intellectual property rights on science and technology in developing countries. Research Policy, 35(6), 808-824. Grossman, G. and Lai, E. (2004), International protection of intellectual property, American Economic Review, 94(1). pp: 1635-1653. Hoekman, B. M., Maskus, K. E., and Saggi, K. (2005). Transfer of technology to developing countries: unilateral and multilateral policy options. World Development, 33(10), 1587-1602. Lesser, W. (2001). The effects of TRIPS-mandated intellectual property rights on economic activities in developing countries. World Intellectual Property (WIPO) Studies, 1, 1-24. Murray, F., & Stern, S. (2007). Do formal intellectual property rights hinder the free flow of scientific knowledge?: An empirical test of the anti-commons hypothesis. Journal of Economic Behavior & Organization, 63(4), 648-687. Raney, T. (2006). Economic impact of transgenic crops in developing countries. Current Opinion in Biotechnology, 17(2), 174-178. Schneider, P. H. (2005). International trade, economic growth and intellectual property rights: A panel data study of developed and developing countries. Journal of Development Economics, 78(2), 529-547. Sell, S. K. (2002). Intellectual property rights. Retrieved from http://www.ata.boun.edu.tr/scanneddocuments/Course_Material/ATA_582/sell.pdf Steinmueller, W. E. (2001). ICTs and the possibilities for leapfrogging by developing countries. International Labour Review, 140(2), 193-210. Towse, A. and Kettler, H. (2002). Public–private partnerships for research and development: medicines and vaccines for diseases of poverty. London: Office of Health Economics. Yang, L., & Maskus, K. E. (2009). Intellectual property rights, technology transfer and exports in developing countries. Journal of Development Economics, 90(2), 231-236. Read More