Elsevier

Research Policy

Volume 35, Issue 6, July 2006, Pages 808-824
Research Policy

The impact of stronger intellectual property rights on science and technology in developing countries

https://doi.org/10.1016/j.respol.2006.04.003Get rights and content

Abstract

This paper identifies some effects of the global trend towards stronger protection of intellectual property rights on developing countries, and traces related debates. Pharmaceutics, biodiversity and ethnic knowledge are critical areas of impact. ‘Trade-relating’ intellectual property might allow developing countries to be compensated, but incentive implementation of optimal compensation in the legislatures seems infeasible. Scientific communities in developing countries are particularly vulnerable to limitations of cooperation and access to information, resulting from stronger intellectual property rights protection, as their efforts to obtain normal science results must be considerable. Consequences of the Bayh-Dole Act and of the patenting of research tools on international scientific cooperation are analysed in this context.

Introduction

The global trend towards stronger intellectual property rights that has taken place in the past two decades has progressed in different dimensions. Protection has extended from invention to discovery; from mechanical devices to living organisms (Byström et al., 1999, Chakravarthi, 1999); from privately funded research and development to publicly funded scientific and technological results1; from information about technology to information about scientific information (David, 2000); from industrial products and technological processes to services and financial and administrative methods (Lerner, 2000), and from ‘brick’ to ‘click’ trademarks (Bubert and Büning, 2001). Certain conceptual borders have moved accordingly. Such is the case of the borders between invention and discovery, and between natural and artificial phenomena. Some equilibria have also shifted: research that was usually published is now patented; patenting research has yielded to protection under trade secret (Lerner, 1994); and the world of open science has shrunk in favour of appropriable technology (David, 2000).

Geographically, the trend towards stronger protection of intellectual property rights has extended from developed to developing countries, affecting even pharmaceuticals and medical devices where, for several decades, many developing countries had imposed restrictions on patenting or simply refused to allow it. In some countries where pharmaceutical patents were previously granted, international firms are now pressing for stronger protection schemes, sometimes involving extraordinary trade secret protection and additional enforcement provisions. Both traditional industrial products and high technology goods have been the target of efforts to strengthen the rights of intellectual property holders.

These legal framework reforms and a rapid evolution of customary government practices have been encouraged by a variety of developments in the economic and political environment of these countries. These include shifts in the international division of labour resulting from the increasing importance of high technology products in trade flows; the rules following the creation of the World Trade Organization (WTO), especially those agreed upon under the Uruguay round; and external pressures connected to the Latin American debt crisis in the 1980s and to financial reform in South East Asian countries in the 1990s (Oh, 2001). A major focus of these pressures has been on South East Asian countries (Maskus, 1997), but their effects have been felt more globally. Even specific national laws of developed countries, like the 1980 Bayh-Dole Act in the United States, allowing universities to appropriate publicly funded research results, have had an impact on the way science is carried out worldwide. The impact is particularly visible in international research collaborations involving academic institutions. At one extreme, specific research contracts in areas such as agriculture are having a wide social impact on developing countries. At the other, the effects of the new intellectual property rights (IPR) environment may be felt by projects linking scientists and teams in high-income countries with their peers in low-income countries, technology transfers, and joint ventures between universities, firms and research labs in these countries. This impact on scientific activities is amplified by the specific manner in which science is carried out in developing countries. As explained below, the effort of developing country scientists to do ‘normal science’ at the international level resembles in many respects that of ‘exploratory research’ being done in developed countries, and this makes developing country scientific communities highly sensitive to access limitations.

This paper identifies some actual and potential impacts on developing countries of the trend towards a stronger protection of intellectual property rights, and reviews some of the debates that have taken place in developing countries concerning these changes. It discusses some observations from recent Latin American experience, as illustrative of the new scenario that is emerging in regard to developing countries’ participation in international collaborative research in the areas of science and technology.

Section snippets

Old debates over IPR in developing countries

Developing countries’ policies and academic debate on intellectual property have followed a pendulum-like movement. Soon after the Second World War, a new perspective on the importance of technology in trade and development was created by the work of United Nations programmes (such as the Economic Commission for Latin America) and independent economists from developing countries. These analyses, which centred on technology transfer issues, concluded that developed and developing countries

The new, global debates

Within developing countries, the terms of the debate changed beyond what could be expected from simple US pressures. Local interests in favour of enforcing stronger intellectual property protection had emerged, in association with the commercialization of imported goods and, to a lesser extent, with the development of local technology. Products such as software, video films and music are easier to copy than traditional industrial products are to imitate. For this reason, copyright has been the

Changes in the IPR regime and their impacts

Four major changes in the global regime of intellectual property rights and trends related to it appear to be affecting the ways scientific and technological research is conducted in developing countries: (1) the already mentioned Uruguay Round of the General Agreement on Tariffs and Trade, that resulted in the 1994 agreement on trade-related aspects of intellectual property rights (TRIPs) and in the establishment of specific conditions for access to the World Trade Organization, (2) the

TRIPs and the WTO

Intellectual property was one of the areas where important agreements were reached during the Uruguay Round of the General Agreement on Tariffs and Trade. The ‘trade-related’ label given to intellectual property matters actually became a mechanism by which concessions in the IPR area could be compensated for by gains in the trade area. Also, as Khor (2001) puts it, “The linking of issues to the possibility of sanctions under the device of attaching a ‘trade related’ prefix to the chosen topics

Trade-relating IPR and the international division of labour

IPR were ‘trade-related’ in the Uruguay Round of GATT that led to the creation of the WTO. ‘Trade-relating’ IPR has a double effect. On one hand, there is a strengthening of IPR that favours industrialised countries. On the other, there are some international trade compensations favourable to developing countries.

The situation may be analysed considering a simple, stylised model where there is exchange between a small, developing and open economy and the rest of the world. It is centred on

Patents and trade secrets in the pharmaceutical sector

The most important impact of TRIPs on developing countries has taken place in pharmaceutics. Following India's legislation of 1970, many developing countries either refused patenting of pharmaceutical products or patented processes instead of products in this sector. At the time of the GATT Uruguay round, almost 50 developing countries did not grant pharmaceutical patents (Lanjouw, 1998, p. 1). The approval of TRIPs has reversed this tendency and changes have occurred in most developing

International scientific collaboration and the Bayh-Dole Act

The relationship between technology and science in a national context depends critically on the volume of scientific activity reached by each country. Albuquerque and Bernardes (2003) studied the relationship between scientific publications and patenting activity for 120 countries in different stages of development. Based on a cross-section statistical analysis, they hypothesise that “the existence of thresholds of scientific production that must be overcome to trigger new channels of

Patenting of research tools and database protection

Basic science research in developing countries has been touched in other forms by the trend towards stronger protection of intellectual property rights. One of them is related to the increasing cost of research tools and databases.

Scientific communities in developing countries are particularly vulnerable to limitations of access to information and to increasing costs of laboratory equipment and materials. In developing countries, the replication of common experiments considered as ‘normal

Biodiversity

One or two decades ago, pharmaceutical MNCs had great interest in using molecules present in plants reputed to be useful in traditional medicine in the humid tropical forests of Latin America and elsewhere. A process of bargaining between MNCs and countries in Central and northern South America ended in the signing of a few ‘biodiversity’ contracts. The clauses of these contracts have been kept in secret in countries like Costa Rica. Other countries intending to sign similar contracts do not

Ethnic knowledge

Traditional knowledge developed over centuries by ethnic groups is increasingly being used for commercial purposes, mostly in agriculture and pharmacy. This use has been the object of abundant litigation and conflict, a trend that has closely followed the interest of companies to appropriate knowledge and the strengthening of intellectual property rights.

The explanation of conflict relating to ethnic knowledge is manifold (see Zerda-Sarmiento and Forero-Pineda, 2002, Zerda-Sarmiento, 2003). The

IPRs, north–south models and development policies: concluding remarks

Two final remarks should be made. First, the contribution of the reviewed theoretical work to understanding the impact of stronger IPRs on developing countries should be appraised. Though these models have been useful to analyse the issues of intellectual property in an international context, future work modelling the impact of IPRs on developing countries should consider the dimensions in which developed and developing countries radically differ. Network or local externalities should be

Acknowledgements

The author is grateful for valuable comments, suggestions and references from the co-editor, Paul A. David, and from Luis Fajardo, Álvaro Zerda, Hernán Jaramillo, Abelardo Duarte and members of the CTS-Colombia project. The research assistantship of Carlos Cañón is acknowledged. Part of this article was produced while the author had a part-time appointment with Universidad del Rosario. Financial support was received from the Stanford Institute for Economic Policy Research and from Colciencias.

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