What is IP (or intellectual property)?
Intellectual property is knowledge which societies have decided can be assigned specific property rights to either individuals, companies or organizations. It allows people, companies and organizations to own their creativity or innovation in the same way they can own physical property.
Intellectual property includes inventions, literary and artistic works, symbols, names, images, and designs used in commerce.
The owner or creator has the right to prevent others to use his property during a limited period of time.
What are the main types of IP?
A patent is a legal creation describing "ownership" of an invention. Patents are issued by individual governments and are meant to benefit both the inventor and the society at large. Patents provide the inventor with a temporary right to produce and sell their invention without the threat of competition. This monopoly results in higher prices which provide incentives for inventors.
A Trademark is ownership over product names or brand identity e.g. NIKE and PUMA. This allows for a distiction to be made between different traders of goods and services
Copyright is ownership over creative materials such as literature, art, music and films, sound recordings, software and multimedia. Copyrights usually provide the author or creator with lifetime ownership over their own materials.
These give ownership protection over designs for a product's appearance and can last up to 25 years.
What's wrong with the current rules on IP and why are they bad for developing countries?
Developing countries, taken as a whole, are net importers of technology and new inventions, most of which are supplied by the developed countries. Companies and organisations in developed countries own the overwhelming proportion of patent rights worldwide.
It is widely recognized that knowledge is essential for development, and that developing countries have much to gain if they are to fully exploit the many opportunities opened up by new technologies. However, increasingly restrictive intellectual property rights are limiting the benefits that new technologies can bring to developing countries.
Fact: Between 1991 and 2001, the net US surplus of royalties and fees (which mainly relate to IP transactions) increased from $14 billion to over $22 billion. In 1999, figures from the World Bank indicate a deficit for developing countries for which figures are available of $7.5 billion on royalties and license fees.
How can developing countries use IP to help their people and their development strategies?
The challenge is for developing countries to use Intellectual property to their own benefit. Only under 2 percent of patent applications in the US in year 1999-2001 came from developing countries.
A reason for that is the lack of capacity for most developing countries to generate their own inventions. To build their capacity, they need to be able first to use other people's inventions, hence their need to have access to cheap technology to kick start their own development. The current IP system is too rigid to cater for these development priorities and needs to be reformed.
Another reason is that the current system does not help developing countries benefit from their own assets and resources. Their traditional knowledge in medicines, their genetic resources, or the names of high-quality products are often patented by foreign companies, which capture all the gains without having to return a fair share of their profits to the origin countries and populations.
A clear illustration of this problem is Ethiopia's Sidamo coffee, which is one of the best coffees in the world. Whilst earning coffee companies higher prices due to its quality and name, it still fails to produce enough returns for coffee farmers to make a decent living. The Ethiopian government wants to trademark this and other Ethiopian coffee names, to build its coffee industry and help its own farmers. However, this trademark is being opposed in the United States by the National Coffee Association of America, of which Starbucks is a member.
Fact: In 2001, less than 1 percent of US patents were granted to applicants from developing countries, nearly 60 percent of which were from seven of the more technologically advanced developing countries.
R&D expenditure is heavily concentrated in developed countries, and in a few of the more technologically advanced developing countries. Few developing countries have been able to develop a strong indigenous technological capability. This means that it is difficult either for them to develop their own technology, or to assimilate technology from developed countries.
Fact: In sub-Saharan Africa in 1998 (excluding South Africa), 35 patents were granted to residents compared to 741 for non-residents. By contrast in Korea, 35,900 patents were issued to residents, compared to 16,990 to non-residents. In the US, the corresponding figures were 80,292 and 67,228.