May 12, 1989

TECHNOLOGY: BLOCKING DIFFUSION TO SOUTH WILL HURT NORTH TOO.

GENEVA, MAY -11 (BY CHAKRAVARTHI RAGHAVAN)-- Current efforts of the U.S. and industrialised countries to "reform" the intellectual property system is a new modality of "technological protectionism" aimed at countering technological development policies of industrialising countries, but it will ultimately hurt innovation in the north itself.

This view was advanced at a recent UNDP/UNCTAD roundtable on "technology and trade policy" at Delphi (Greece) by the Brazilian ambassador to GATT and other UN agencies in Geneva, Rubens Ricupero.

In a paper at the round table, ricupero said that the real in the Uruguay round negotiations on Trade-Related Intellectual Property Rights (TRIPS) is "the freedom to adopt intellectual property regimes in accordance with developmental interest of individual countries - whether developed or developing - as against an obligation to follow strictly determined and multilaterally enforced international norms which may not necessarily atake into account such interests".

The Brazilian delegate pointed out that the balance between the competing interests of assuring wide dissemination of technological advances and promoting temporary monopolies to inventors to allow them financial rewards had always been settled in a given national context and taking account of level of technological development of a given country.

"This balance is being turned in favour of a multilateral system involving strong minimum standards of intellectual property protection which evades completely the need of maintaining an equilibrium of rights and obligations of holders of IPRS".

Analysing the background to the current moves, Ricupero noted that the U.S. and some other advanced industrial countries seemed to have become "increasingly sensitive" to high-tech issues.

The U.S. seemed to believe that the industrial rise of Japan and most of the NICS had been the result of "inadequate policies and practices allowing for a rapid technological diffusion among countries.

From this view, "the U.S. pretends that the safeguarding of its competitive position depends upon a more stringent protection of its high-tech industries by means of higher standards for protection of IPRS of its enterprises and individuals".

The U.S. and other ICS felt that strengthening IPRS would provide incentives for innovation for their national enterprises and TNCS and be a defensive barrier against foreign imitation of nationally developed technologies.

While these arguments were not per se objectionable, "they could entail practical consequences susceptible of weakening the commitment of advanced countries for a liberal international economic order", Ricupero warned.

Stringent regimes on IPRS would impact on international trade and competitiveness of national economies and put barriers on free flow of information which was essential for continuous technological advancement of societies and smooth functioning of the patent system itself.

While the U.S. efforts to transfer IPR protection from national to a multilateral framework with self-enforcing rules was "at least debatable", there was the danger that this multilateralisation would in fact result in a unilateral reinterpretation of principles and norms in the traditional structure of IPR protection.

A possible framework of a multilateral framework, the Brazilian delegate warned, would be "imposition of all obligations" on states which would become actionable for infringements by private parties, while all the ‘rights’ would rest with proprietors and holders of the rights".

As a result, the balance between economic costs and social interests linked to monopoly rights would be in jeopardy, and there would be artificial uniformisation of norms and standards, disregarding levels of development among national states.

As the majority of third world countries saw it, the intended reform of the world intellectual property system would be a "new modality of technological protectionism and a new trade policy to substitute promotion of direct investment or technology licensing for direct "access" to foreign markets.

Such a new policy would involve a freeze in the existing international division of labour, via control of technology transfers to third world countries, and even entail "freezing of the current comparative advantages in the manufacture and commerce of manufactured goods, manufactured goods, Ricupero who chairs the informal third world group in GATT added.

The new efforts, Ricupero noted, would allow for measures and for arrangements concealment of valuable technology and limiting access to applied scientific research, "in complete contradiction with principles of IPR protection and of international cooperation in the academic field".

The rationale for this was protection of national security and curtailing federal deficit. But this was already a matter of concern for the academic community and U.S. scientists had found limiting flow of scientific and technical information had already begun to hurt the U.S. economy.

The problem would be compounded if the introduction of more stringent patterns in the field of IPRS would also limit both accesses to technical knowledge and restrict the dissemination of that knowledge inserted in patent documentation.

This was already being attempted in the framework of the world intellectual property organisation in respect of integrated circuits to give the holder of the IPR rights in this the possibility of keeping confidential "strategic elements of technological technological information".

(Negotiations for IPR protection for integrated circuits are currently under way at a diplomatic conference in Washington.)

Contrary to pretended purposes, ricupero said, the consequences of such measures would be significantly pernicious to U.S. companies.

Ricupero cited U.S. scholars for the view that the U.S. which had enabled post-war world economic expansion as a "benevolent hegemony" was now becoming a "predatory hegemony" to extract economic gains through unilateral commercial policies.

The main force behind U.S. initiative was to gain concrete trade interests through increased dominance of international markets for both "intangible" and "real" products.

But even if the U.S. succeeded in these efforts to raise IPR protection, Ricupero added, it was doubtful if these steps would actually restore U.S. technological lead, reduce or eliminate the trade imbalance or eliminate most counterfeiting.