Oxfam Discussion Paper on Intellectual Property and the Knowledge Gap
December 2001
This paper discusses the impact of intellectual property rules in the developing world,
and possible campaign strategies to change them. These rules matter because they affect
people's access to medicines, seeds and educational materials, and the ability of poor
countries to develop and participate effectively in global markets. Oxfam hopes that the
paper will be a useful contribution to others working on the issue, and will prompt
feedback for its own work on WTO patent rules.
Section 1 - The problem
1. The rules
One of the most intense struggles in the campaign to reform globalisation concerns the
control of knowledge. Will knowledge be monopolised by corporate interests for private
profit, and shaped by the markets of rich consumers, or will it be kept within the public
domain, and used to help end poverty, hunger, and disease? At a time when millions of
people are deprived of basic rights to health, food and education, and inequality is
growing, this question could not be more critical.
The World Trade Organisation's TRIPS Agreement, introduced in 1995 after intense
corporate lobbying, is at the centre of this controversy. It is the main international treaty
determining rights over intellectual property (IP), which includes patents, copyright and
trademarks.
TRIPS obliges all WTO members to grant patent-holders - which are mainly large
Northern-based corporations - temporary monopolies for their 'inventions'. This system
is supposed to stimulate innovation, as it allows patent-holders to prevent competition,
raise prices and thereby recoup the costs of their investment.
Bilateral trade agreements such as the Free Trade Area of the Americas (FTAA) are also
being used to ratchet up national IP standards to even higher levels than those required
by TRIPS.
All these rules will affect the lives of billions of people, yet until recently they have
been introduced with minimal public debate.
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2. Their impact
IP protection can be one useful incentive, alongside others, to stimulate investment and
innovation. Unfortunately, TRIPS and other trade agreements require all countries to
implement very high minimum standards of protection, irrespective of their level of
development, or of a sector's potential contribution to the realisation of human rights.
This one-size-fits-all approach is damaging for both welfare and innovation. It has
shifted the balance too far towards the private interests of corporate IP holders, and
away from the users of knowledge.
Many of the damaging effects of international IP rules will be most acutely felt in
poor countries. Oxfam fears the new regime will:
Exclude poor people from access to vital 'knowledge goods' such as medicines, seeds,
and educational materials. TRIPS will result in higher prices for knowledge-rich goods,
further excluding poor people from access to medicines, seeds, computer software, and
educational materials. The high price of HIV/AIDS medicines graphically illustrated the
iniquitous effect that patents can have. Higher prices also limit the ability of
developing-country governments to meet basic human rights to food, health, and
development.
Exacerbate the technological divide. There is already a wide technological gap between
rich and poor countries. Although developing countries are rich in informal knowledge,
they are net importers of the kinds of high-tech goods and know-how protected by
TRIPS. Industrialised countries, on the other hand, account for 90 per cent of global
research and development (R&D) spending, an even higher share of patents, and are the
main exporters of IP.
TRIPS will exacerbate this divide by increasing the cost of knowledge-rich goods
imported by developing countries. Royalties and licence fees paid by developing
countries to patent holders in the industrialised world have been climbing rapidly since
the mid-1980s. In 1998, the US received a net surplus of more than US$23bn from its
IP exports.
Further skew R&D towards rich-consumer markets rather than the basic needs of the
poor. There is a massive 'market failure' in R&D into medicines and agriculture. Most
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global R&D is targeted at the markets of rich consumers rather than at the basic needs
of the poor. Less than 10 percent of global spending on health research addresses 90
percent of the global disease burden. Similarly, much agricultural research aims to
improve the appearance and taste of produce for consumers in rich markets, rather than
to support the sustainable farming of staple foods such as sorghum and cassava, on
which many poor farmers depend.
Global IP rules will worsen this problem by further concentrating R&D into profitable
areas such as cures for obesity or impotence. Even with stronger IP protection in place,
women and men living in poverty in developing countries simply do not have sufficient
purchasing power to significantly influence the direction of R&D. Only large-scale
public funding, and public/private partnerships, will ensure that R &D is directed to
meeting their basic needs.
Restrict the ability of poor countries to innovate and participate effectively in global
markets. Supporters of TRIPS say that short-term welfare losses caused by higher prices
will be offset by longer-term benefits through increased innovation and technology
transfer for poor countries. But the lack of technological capacity means that foreign
companies will capture most of the benefits of stronger IP protection. Moreover, by
restricting the scope for developing countries to imitate and adapt new technologies,
TRIPS will inhibit future innovation, development, and the ability of countries to
compete effectively in global markets.
There is little evidence to suggest that higher levels of IP protection in developing
countries will prompt greater foreign direct investment or licensing by TNCs, even in
pharmaceuticals and chemicals.
Encourage piracy of biological resources and traditional knowledge of farmers and
indigenous people in the developing world. TRIPS was designed to prevent so-called
piracy by developing countries of the inventions and products of rich countries. But it is
silent about the systematic appropriation of biological knowledge and informal forms of
traditional knowledge from developing countries by large Northern companies.
Section 2 - Campaign Strategies
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This section draws on Oxfam's recent experience of campaigning on the issue of patents
and access to medicines (the Cut the Cost campaign), and raises some questions about
the future focus of civil-society campaign strategies.
1. What should be the focus for campaigning on TRIPS?
A key question is whether it is more effective to campaign for broad reform/abolition of
TRIPS, or to focus on achieving change in specific areas, such as patenting of
medicines, patenting of plant genetic resources, or patenting of life forms.
Oxfam tends to focus its popular campaigning on what it calls 'wedge' issues. A wedge
provides a concrete illustration of a problem caused by global policies in a form that can
be easily understood by the broader public. The idea is that once people understand the
grassroots, human impact of particular policies, they will be encouraged to campaign for
broader policy change. So, for example, the problem of patents and access to medicines
is a 'wedge' issue for the reform of TRIPS. The fact that no poor country could afford
expensive, patented HIV/AIDS medicines provided a particularly dramatic illustration
of the problem.
Prior to the launch of Cut the Cost, Oxfam's research showed that few people knew
what a patent was, and that if they did know, they were more likely to think that it was a
good thing than a bad thing. Even fewer people knew what the WTO or TRIPS were.
On the other hand, many more people were concerned about health in poor countries.
Focussing popular campaigning on wedge issues does not stop Oxfam from raising
broader concerns in its publications and lobbying. It also believes it is important to form
cross-sectoral alliances with different groups campaigning on TRIPS - whether on
seeds, medicines, genes, or software. This allows groups to co-ordinate campaigning but
without losing the specificity of each campaign. The TRIPS Action Network (TAN)
formed last year is a good example of this approach. It has coordinated days of actions
on TRIPS and developed an NGO statement calling for wide reform of TRIPS.
2. Incremental or Fundamental Change ?
Various strategies for campaigning on IP rules are possible, and can be complementary.
In the case of TRIPS, the demands range from outright abolition of the agreement,
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through to re-interpretation (as in the Doha declaration on TRIPS and public health).
Oxfam pursues a twin-track strategy, focusing on concrete changes that are achievable
in the short term, while also pressing for more fundamental change in the long term.
Our experience is that small gains can strengthen rather than undermine the momentum
for more fundamental change.
In the case of the Cut the Cost campaign, the policy aim is to reform the TRIPS
agreement in favour of public health. The short-term goal is to strengthen the existing
public-health safeguards in TRIPS, and to stop rich countries and TNCs bullying poor
countries over their patent laws. The longer-term goal is a substantive review of TRIPS
with a view to introducing longer transition periods for developing countries to comply
with TRIPS, and allowing developing countries much greater flexibility in determining
the length and scope of pharmaceutical patenting, including the option to exempt
medicines all together. While some groups and governments fear that re-opening TRIPS
may result in something worse, Oxfam believes that growing public pressure will
prevent
this
from
happening.
Some groups have expressed concern that the Doha declaration on TRIPS and public
health could undermine the case for more radical reform by legitimising the TRIPS
Agreement. However, Oxfam believes that the declaration, though limited, will result in
some concrete health gains, set a precedent to reinterpret TRIPS in favour of other
fundamental rights, and build momentum among the public and developing countries at
the
WTO
for
further
reforms
to
TRIPS
in
the
future.
3. TRIPS out of the WTO?
Oxfam has not so far made the removal of TRIPS from the WTO a focal point of its
popular campaigning, for three reasons. First, although there is a strong rationale for
such a proposal, not least because TRIPS is inherently protectionist, the arguments seem
unlikely to mobilise public opinion. Second, the idea is unlikely to win concrete backing
from developing-country members of the WTO. Finally, a public campaign on such a
position would also require that a coherent alternative to TRIPS be put forward. Giving
control of all IP treaties to the World Intellectual Property Organisation (WIPO), for
example, would not necessarily be desirable, given its narrow pro-IP stance.
However, Oxfam will argue in its lobbying that the future review of TRIPS should look
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seriously at this issue, and welcomes other groups campaigning on it, because this
provides a strong indication of NGO concern and adds to the pressure for change.
4. Global, regional or national campaigns?
Campaigns should not stop or start with TRIPS. Strong campaigns about national and
regional-level IP rules are also vital. Many developing countries have been or will be
pressurised to introduce national laws that grant levels of IP protection that go beyond
TRIPS. Increasingly, countries are also signing up to bilateral or regional economic
agreements that mandate levels of IP protection that are at least comparable to TRIPS,
and are often even higher. This means that even if TRIPS were reformed in future,
countries would still be locked into anti-developmental IP rules. National-level
campaigning can be based on a broad social base, including small and medium
enterprises that are prejudiced by the high cost of technology.
The United States has been particularly aggressive in pursuit of 'TRIPS plus' rules,
employing direct political and economic pressure, and formal trade treaties such as the
US-Jordan agreement and the FTAA. If developing countries win further concessions
on TRIPS, one can envisage converting the WTO TRIPS Council into a body whose
purpose is to police a ceiling for IP standards, rather than a minimum - a role entirely
consistent with the pro-competition philosophy of the organisation.
In the case of medicines, now that greater clarity has been won on the issue of what
TRIPS does and does not allow, it is important that governments use the flexibility
within TRIPS to implement national legislation in support of access to medicines.
Strong national campaigns in South Africa, Brazil, and Thailand have shown what is
possible at this level.
5. Other Action
If TRIPS reforms are to translate into real gains for poor people, campaigners will also
need to press for increased debt relief and international aid, and for governments to
finance R&D in health and agriculture which seeks to work with people living in
poverty to address their needs. More funds are also urgently needed to help finance the
purchase of medicines in least-developed countries. Groups could also campaign for a
technology transfer fund financed by a small tax on patents to help the poorest nations.
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Conclusion
World-wide concern about the effects of patents on the price of life-saving drugs has led
to victories in the South Africa court case, in the US-Brazil WTO dispute and at Doha.
This has created a political climate in which it is much harder for rich countries to
intimidate the developing world over patents, though we still have the task of reforming
the rules.
The tide is turning in the patenting debate. There are now greater opportunities to
increase ordinary people's understanding of the other ways in which current IP rules
contribute to poverty and underdevelopment, and to increase political pressure for
reform. This will be a significant step towards a world where knowledge and innovation
are social assets that serve people, above all those in need, rather than corporate assets
that serve shareholders.