Transcript Intellectual Property Rights and Social Development: Issues

Intellectual Property Rights and
Social Development: Issues and
Evidence
Keith E. Maskus
Professor of Economics, U of Colorado Boulder
International Conference on IPR and Development
WIPO, Geneva, April 2016
Defining social development and role of IPRs
• A broad and all-encompassing concept but here let’s take it to mean:
• Establishment and sustainable growth of markets and institutional structures to facilitate and
foster sustained improvements in living standards.
• Increasing abilities of society (governments, firms, educational institutions, health authorities,
etc.) to meet the needs of citizens for physical well-being and fruitful social interactions.
• Intellectual property rights (IPRs) can have multiple and cross-cutting impacts on these
capabilities.
• How effective or costly IPRs may be depends on a large set of socioeconomic factors.
• IPRs properly need to be embedded in broader social and economic systems to promote
development:
• Innovation, adaptation, creativity and growth;
• Competition and regulation;
• Education, public health, and access to knowledge.
• Today I hope to offer a bit of structure and evidence-based observations to some of this
complexity.
What are the promised gains of a globalized
IPRs system?
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Improve international and national innovation incentives.
Encourage R&D in technologies and products needed in poor countries.
Expand trade and investment in high-technology goods and networks.
Support markets for international knowledge transfer and diffusion.
Improve consumer guarantees of product origin.
Build and support domestic and global markets for creativity.
Facilitate beneficial price differentiation.
Offer more scope for protecting and developing traditional knowledge.
And some potential costs?
• IPRs carry administrative and enforcement costs.
• They may support market power in presence of weak competition.
• There is a potential for licensing abuses.
• Unbalanced patent and trade-secrets rules may block follow-on
innovation and restrict imitative competition.
• IPRs may raise costs of medicines, agricultural inputs, and needed
environmental technologies.
• Rigorous copyrights and database protection may restrict fair-use
access to educational, scientific, and cultural materials.
Evidence from economic research
• Caveats:
• Research is difficult due to data scarcity, measurement problems, causation issues,
and confounding factors.
• “Public goods” questions in particular are hard to study.
• Much of the research to date analyzes periods prior to effective TRIPS
implementation in developing countries.
• Almost no serious research asks about impacts of IPRs in combination with other
important conditions and policies.
• Following is a brief overview of available evidence in 3 areas.
• Unfortunately we have little systematic evidence in other areas of “public
goods” and development: environmental technologies, agriculture, genetic
resources, and others.
IPR reforms and innovation
• It’s remarkable how little is known about this fundamental question.
• Casual evidence since TRIPS:
• Developed economies have not become more innovative (R&D productivity) relative to trend
rates.
• Emerging economies are engaging in more innovation and technology exports.
• But this change is heavily concentrated in a few countries and industries.
• Econometric studies are mixed but support 2 conclusions:
• Patent reforms can stimulate more innovation and exports in middle-income emerging
economies with human capital and competitive markets.
• There is little evidence to date of such effects in poor countries.
• Trademark protection can help build product markets in developing economies.
• We know very little about the sources of creativity in poor countries and informal
sectors.
IPR reforms and cross-border technology
diffusion
• There seems to be a positive causal impact of IPR reforms on inward
technology transfer through market channels.
• But not in the poorest countries.
• In middle-income and emerging economies there are threshold and
complementarity effects:
• Education and human capital;
• Effective domestic competition;
• Adequate governance and infrastructure.
• We do not have yet a good understanding of the microeconomic
mechanisms that explain these findings.
• And we have not studied well the impacts on “non-market” channels:
imitation and copying.
Patents and pharmaceuticals: R&D
• Cross-country evidence about drug patent reforms:
• Strengthened laws in developed countries do expand R&D.
• Reforms in most developing countries do not expand local or global R&D.
• Since TRIPS there have not been noticeable increases in private R&D aimed at
treatments for diseases most prevalent in poor countries.
• Since TRIPS and 2005 patent law the larger and export-oriented
Indian firms have raised R&D investments sharply.
• But not in original drugs for Indian or DC markets.
• Patents can support efficient licensing in private-public drug
development partnerships and distribution of essential medicines.
Patents and pharmaceuticals: prices and
availability
• The obvious concern: what will happen to drug prices as generic competition is
diminished?
• An important simulation study using pre-patent law market structure: prices of
quinolones in India could rise by 100 to 300% with substantial welfare losses.
• A post-2005 study econometrically analyzing detailed price impacts found fairly modest
effects in India (3% to 20%, depending on local competition).
• New evidence across countries finds similarly modest price effects in developing
countries with stronger post-TRIPS patent laws.
• Why the modest effects? Price regulation? Threats of compulsory licensing? It’s not yet
clear and we need more research.
• Patents and launches: availability of new drugs is delayed significantly by the absence of
patents and/or presence of strong price controls.
• There is anecdotal evidence of declining amounts of dangerous counterfeit medicines.
IPRs and access to knowledge
• This is a vastly understudied area of global development policy.
• Among the most important contributors to social and economic
development is access to international knowledge and information:
• Increasing and sustainable technology transfer in medicines, green
technologies, and bio-engineered agricultural varieties.
• Knowledge is needed to adapt technologies to local conditions.
• Building a domestic S&T capacity is important for linking to innovation
networks.
• Educational needs for access to learning materials.
IPRs and access to knowledge
• Patents, trade secrets and copyrights can play useful roles in
facilitating rights sharing and technology diffusion.
• But the international patenting system is not sufficient to incentivize
the needed R&D investments and transfers of quasi-public goods.
• Nor will it pay for localized adaptation investments in poor countries.
• Rigorous copyright protection does raise costs of access to published
materials.
Policy lessons for developing countries?
• Policy makers can take steps to help their economies benefit from
IPRs at least cost.
• Strive for transparency and certainty in administration and enforcement of
the IPRs system.
• Take advantage where needed of available limitations and exceptions on the
scope of rights:
• Patents: rigorous standards, opposition procedures, development-oriented fees
structure, research exemption, compulsory licensing, etc.
• Trade secrets: narrowly defined as possible.
• Copyrights: transparent but robust limitations and exceptions.
• Take steps to encourage and protect domestic knowledge development and
use: benefit sharing.
Policy lessons for developing countries?
• IPRs should be conceived of as a component of broader development
strategy.
• Key factors suggested by research:
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Take further steps to improve domestic investment climates.
Build R&D capacities in domestic firms.
Invest in science and technology education.
Subsidize research into localized adaptation, including with international
teams of researchers.
• Competition maintenance and (in medicines at least) price regulation.
• Openness to trade and investment to encourage international network
linkages.
Global policy lessons?
• How can useful technology transfer of public goods be optimized?
• There are many possibilities but here are two with large potential
payoffs.
• International investments in knowledge pools into which publicly funded
scientific research results and applications would be placed for licensing on
concessional terms.
• Increases in medium-term “mobility visas” for skilled technical workers.