Assuring Development Gains from
the International Trading System:
Intellectual Property Rights
Simonetta Zarrilli
Division on International Trade and Commodities
UNCTAD
New York – 7 June 2005
(Simonetta.Zarrilli@UNCTAD.org)
Why IPRs?
IPRs have been designed to benefit society
by providing incentives to introduce new
inventions and creations. Therefore, their
purpose is not the exclusive benefit of
individuals/corporations but of the public
community at large
What levels of IPR
protection would bring
benefits? To whom and in
which societies?
What levels of IPR protection
would be appropriate for the
development needs of the
developing countries?
History and Evolution of IPR Regimes
Long history:
• The first patent law was passed by the
Venetians during Renaissance
• English Statute of Monopolies of 1624
• English Statute of Anne of 1710 on copyright
law
• US Patent Act of 1836: First modern patent
law
• International level: 1880s formation of unions
in Europe for the protection of industrial
property and literary/artistic works
• Most developments have been taking place
from the 1960s onwards
History and Evolution of IPR Regimes
Evolution:
• The extension of protectable subject matter +
elimination/reduction of exceptions
• The creation of new rights
• The progressive standardization of the basic
features of IPRs
Far-reaching potential economic &
social implications of IPRs
•Public interest in IPRs worldwide
has reached unprecedented levels
•Views on IPRs effects differ quite radically
IPRs and Competitiveness
The commercial importance of IPRs has grown
considerably, especially since the 1970s
– Pressure on business and national economies to be
competitive, inter alia, through innovation and
creativity  new products, new services,
differentiation between products
– Technical knowledge, artistic creativity, reputation
and distinctiveness add market value to goods and
services
IPRs help to maximize the opportunities for
private appropriation while minimizing the
risks of “free-riding”
IPRs and Trade
• The protection in a given country of
a company’s R&D investments
through IPRs may induce that
company to export its high
technology products to that country
(positive link)
• IPR-holders may block imports if
those infringe upon their domestic
exclusive rights (negative link)
IPRs and Investment
In a country where
high-intensity R&D
sectors are
important
(pharmaceuticals,
chemicals, software,
aerospace), IPR
policies may
provide incentives
for R&D and FDI
In a country where lowintensity R&D sectors
are dominant
(agriculture, textiles,
electronic assembly) IPR
may have limited effect
on innovation and FDI,
while reducing diffusion
and increasing the cost of
foreign technology
At certain stages of development, weak
levels of IPR protection are more
likely to stimulate economic
development and poverty alleviation
than strong levels IP protection
becomes important only when
countries reach a certain degree of
technological capacity and income
level one size does not fit all
• Numerous countries have at times exempted
certain sectors of industry from patent
protection and/or included safeguards
• The 1883 Paris Convention for the protection
of industrial property and the 1886 Berne
Convention on literary and artistic works
allowed considerable flexibility in the design
of IP regimes
• Countries in East Asia used until the 1970s
weak forms of IP protection to facilitate
technological learning and promote their own
industrial policy objectives
Finding the right balance between the interests of
creators, users and the public is difficult.
It is particularly difficult for countries where some
industries may benefit from high levels of IP
protection, but others may not
Different views within countries and among groups
of countries
Balancing the interests is not a purely economic
calculation, it is an inherently political exercise
which has important social implications
The Emergence of TRIPS and
its Main Features
• TRIPs included in the single undertaking of the UR
• It establishes minimum standards for all types of
IPRs (but utility models and breeders’ rights)
• It is based on and supplements, with additional
obligations, the Paris, Berne, Rome and Washington
Conventions
• It extends to IPRs the principles governing
international trade: MFN, NT
• It contains provisions relating to enforcement of
IPRs, amendment and reservation
The « Development Deficit » of TRIPS
• TRIPS does not include “General Exceptions”
• TRIPS does not include S&D provisions (except
for transitional periods and ToT to LDCs)
• Different language: Art. 27.1 (patents shall be
available and patent rights enjoyable without
discrimination as to the field of technology); Art.7
(The protection and enforcement of IPRs should
contribute to the promotion of technological
innovation and to ToT, to the mutual advantage of
producers and users of technological knowledge
and in a manner conducive to social and economic
welfare, and to the balance of rights and
obligations).
The « Development Deficit » of TRIPS
What if it does not?
•No remedies and no sanctions in the event of failure
•Strengthened global protection for the suppliers of
technology, but no international framework to ensure that:
•ToT takes place
•Restrictive technology licensing practices are
minimized
Desirable and feasible measures:
•Commitments to ensure that the benefits of publicly
funded research are available to all
•Commitments to ensure open access to scientific
databases
•Commitments to ensure access to vital technology
The « Development Deficit » of TRIPS
• Art. 8 (Members may…adopt measures necessary to
protect public health and nutrition, and to promote
the public interest in sectors of vital importance to
their socio-economic and technological development.
Measures may be needed to prevent the abuse of
IPRs by right holders or the resort to practices
which unreasonably restrain trade or adversely
affect ToT, provided that such measures are
consistent with the provisions of this Agreement ).
• In case of conflict between promoting the public
interest/preventing abuses and adhering to the
Agreement, TRIPS indicates that the latter should
prevail.
Does this language render null and void the
Principles?
Overcoming the « Development Deficit »
1. Articles 7&8 dealing with Objectives
and Principles need to be
operationalized
2. Ensure that TRIPS does not limit
policy options aimed at development 
the flexibility provided for in the
Agreement needs to be fully available
to WTO Members
3. Amendment, Interpretation
1.
Articles 7&8 need to be operationalized
Doha Declaration on TRIPS and Health
• Each provision of TRIPS shall be read in the
light of the object and purpose of the
Agreement as expressed, in particular, in its
objectives and principles (Art. 5(a));
• TRIPS does not and should not prevent
Members from taking measures to protect
public health;
• TRIPS can and should be interpreted and
implemented in a manner supportive of WTO
Members’ right to protect public health and
promote access to medicines for all (Art. 4) 
• Article 7&8 will inform and influence every
other provision of TRIPS
• The Declaration provides guidance to Panelists
and AB as to how TRIPS should be interpreted
• The Declaration provides guidance to
governments as to how TRIPS should be
implemented
• WTO Members have the right to protect public
health and this right cannot be prejudiced by
TRIPS
• WTO Members have the right to promote access
to medicine for all
• The Declaration recognizes the “flexibilities” in
the TRIPS Agreement
First effort at the WTO Ministerial-level
to « rebalance » TRIPS in response to the
desire of the larger WTO membership
and outside world.
However, ethical concerns played a very
important role. Would this ”rebalance”
happen when ethical concerns are not as
visible ? Would the public opinion be
mobilized for, for example, access to the
technology?
The 30 August Decision and the
implementation difficulties
2.
Flexibilities: Illustrative List
Implementation and review of national legislation
in the light of the flexibilities allowed by TRIPS
and by the Doha Declaration on TRIPS&Health
• To include in the national legislation
– provisions for compulsory license and to keep
the freedom to determine the grounds upon
which such licenses are granted
– provisions related to disclosure of origin, PIC
and benefit sharing
– provisions related to the ‘early working
exception’
• To allow freedom to protect pharmaceuticals test
data through exclusive or non-exclusive rights
regimes
• To determine the novelty and inventive steps
requirement in a manner that prevents ‘bad
patents’
• To allow parallel imports
• To keep freedom regarding
– the exclusion of plants and animals from
patentability
– protecting plant varieties by a sui generis system
• To make use of GI to avoid domestic products to
become ‘generic’
• To develop national competition law
3. Amendment, Interpretation
• Amendment
– Difficulties related to TRIPS&Health
not encouraging
• Interpretation
– Interpretative guidance (Doha
Declaration on TRIPS&Health)
– Authoritative interpretation (Art. IX, 2
of the WTO Agreement)
Improving policy-making and drafting
• Establishing inter-agency governmental
committees
• Involving private sector &civil society
• Undertaking interdisciplinary studies on the
implications of IPRs on different sectors and
activities
• Training government, academia and NGO
professionals in IPR policy-making and
drafting
• Putting emphasis on TA aimed at policy
formulation
• Monitoring TA so as to ensure unbiased advice
that presents all options available to developing
countries
UNCTAD’s overall role
• UNCTAD’s mandate as the UN focal point for the
integrated treatment of trade and development
• UNCTAD assists developing countries and economies
in transition to beneficially integrate into the
globalizing world economy
• UNCTAD promotes the effective implementation of
the MDG commitment “to an open, equitable, rulebased, predictable, and non-discriminatory
multilateral trading and financial system”
– These tasks are carried out through:
• Intergovernmental work and consensus
building
• Analytical work
• Training and technical cooperation
UNCTAD’s role: IPRs and ToT
São Paulo Consensus, UNCTAD Ministerial Conference, June 2004
• UNCTAD should undertake
– Analysis of the development dimension and implications of
IPRs & TRIPS, including improvements in ToT, protection of
TK, genetic resources, and fair and equitable benefit sharing
• UNCTAD’s analytical work should
– draw lessons from successful experiences with ToT through
FDI and other channels;
– support efforts by developing countries to respond to
technological changes, identify best practices in ToT and assess
the effectiveness of policies aimed at domestic innovative
capability-building, including the role of IPRs;
• UNCTAD should assist developing countries
– in identifying ways and means to operationalize ToT in
international agreements, and in maximizing the potential
benefits of those agreements
UNCTAD’s role: IPRs and ToT
• IPRs
–
–
–
–
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Resource Book on TRIPS and Development
Policy Discussion Paper on IPRs and Development
Study on TRIPS and trade negotiations
Book on national experiences in protecting and promoting TK
Studies on specific topics, e.g. compulsory licensing, copyright in the
digital era, product patents in the pharmaceutical sector
– Support to developing country negotiators within the TRIPS Council
– Technical cooperation activities
• ToT
–
–
–
–
Studies on selected topics
Reference book on key issues
Active participation in the WTO WG on ToT
Technical cooperation activities
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