Oxfam: A simple guide to Patents and Trademarks - Abbott's Greed

Oxfam: A simple guide to Patents and Trademarks

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Otherwise known as IP (the longer way to say it is - intellectual property) and why it is so important for poor countries.

1. What is IP (or intellectual property)?

Intellectual property is knowledge which can be assigned specific exclusive rights to individuals, companies or organisations. It allows people, companies and organisations to own their creativity or innovation in the same way they can own physical property.

In exchange for disseminating and distributing their knowledge, creators and inventors are granted a monopoly on the income generated by their knowledge. This monopoly results in higher prices, which provide incentives for inventors.

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.

2. What are the main types of IP?

Patents:

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.

Trademark:

Trademark is over product names or brand identity e.g. STARBUCKS and NOVARTIS. This allows for a distinction to be made between different traders of goods and services.

Copyright:

Copyright is ownership over creative materials such as literature, art, music and films, sound recordings, software and multi-media. Copyrights usually provide the author or creator with lifetime ownership over their own materials.

Copyright protects the form or expression of an idea- not the idea itself. The idea may still be used by others in their own creative works.

Industrial design:

These give ownership protection over designs for a product’s appearance and can last up to 25 years.


3. 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 most of the patent rights worldwide.

Fact: In 2001, less than 1% of US patents were granted to applicants from developing countries, nearly 60% of which were from seven of the more technologically advanced developing countries(i).

It is widely recognised that knowledge is essential for development, and that developing countries have much to gain if they can fully exploit the many opportunities opened up by new technologies.

However, increasingly restrictive intellectual property rights can limit the benefits that new technologies can bring to developing countries by restricting people’s access to technology.

Four concrete examples:

  1. Imagine a farmer in Thailand who cannot save his harvested rice for sowing next year. Why? – because he is frightened about being taken to court for violating a patent. So he ends up buying seed from a commercial supplier at a high price, and as a result cannot afford to keep his daughter at school.
  2. Think of a student in a technical college in Egypt who cannot buy the textbooks she needs because now she can only get the expensive versions marketed by foreign publishers.
  3. Think of a small businessman in Peru who cannot buy computers for his company because the software is too expensive. He becomes less competitive and has to lay off six employees, who have no chance of finding new jobs.
  4. Think of a mother in Tanzania who is watching her child die from cancer because she cannot pay the high price for the patented medicine.

Of course, in many cases, with great sacrifice, the student will buy the text books, the company will buy the licensed software and the mother will buy the medicine, and all that money will end up in the hands of the giant international companies that own 90 % of the world’s patents.

In fact, because of global Intellectual Property Rights, developed countries receive every year vast financial transfers from individuals, companies and governments in 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 (ii). 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 (iii).

4. 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.

A reason for that is the lack of capacity for most developing countries to generate their own inventions. 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.

Fact: In sub-Saharan Africa in 1998 (excluding South Africa), 35 patents were granted to residents compared to 741 for non-residents. In the US, the corresponding figures were 80292 and 67228 (iv).

To build their capacity, developing countries 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.

i Those developing countries which were granted over 50 US patents in 2001 included: China 266, India 179, South Africa 137, Brazil 125, Mexico 87, Argentina 58, Malaysia 56. China (Taiwan) received 6545 and Korea 3763 but these are not developing countries on the World Bank classification. Our count is that 1560 US patents were granted to developing countries on the World Bank list, out of total grants of 184057 in 2001. Source: www.uspto.gov/web/offices/ac/ido/oeip/taf/cst_all.pdf ii US Department of Commerce, Bureau of Economic Analysis, various publications. iii World Bank (2001b) “World Development Indicators 2001”, World Bank, Washington DC, Table 5.11. Source: www.worldbank.org/data/wdi2001/ iv WIPO Statistics. Source: www.wipo.int/