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Analysis: Most Developing Countries Stand to Lose from a Worldwide Patent System

Morten Walløe Tvedt(10.05.2010) A recently published analysis by FNI legal scholar Morten Walløe Tvedt finds that the probable effects of introducing a Worldwide Patent System are overwhelmingly negative for most Third World nations, with more adverse effect the less developed a country is.

The aim of Tvedt's study has been to understand how the ongoing process within the World Intellectual Property Organization (WIPO) to further harmonize patent law might affect developing countries.

While not formally on the agenda, such a process may lead to the establishment of a supranational Worldwide Patent System (WPS). In a WPS, one global patent bureau, or perhaps a few major ones, will have the authority to issue a worldwide patent that would become legally binding for everyone, companies and persons alike, in all member countries.

Tvedt's overall conclusion is that developing countries will have few opportunities to use such a system for their economic growth, while an increased number of foreign patents will narrow down their free and open space for innovations.

The analysis shows that it is primarily the large, multinational companies (MNCs) with market interests in several countries that stand to benefit from a WPS. Developed countries, especially Anglophone countries and countries where other major languages are used, would also stand to gain. This is mainly because a WPS would substantially reduce duplication of work and would reduce workloads for both MNCs and national patent offices. This is not necessarily a good thing for a developing country. Most developing countries have few, if any, technologically advanced MNCs. A global system may also reduce the patent fee as a possible revenue for governments of developing nations.

Reasons to worry

Tvedt identifies a number of important reasons why developing countries should worry about further harmonisation of patent law and the establishing of a global patent office, including the following:

   Decreased national flexibility: A WPS would remove or decrease the flexibility available to countries to consider national priorities when processing patent applications, and use this strategically to build national research and development capacity. For instance, a WPS would probably enforce a relatively expansive definition of the term 'invention', as preferred by industrialized countries, with developing countries left unable to set stricter criteria before granting patent rights.

   More foreign patents: With a WPS, patents would be legally binding also in countries with markets so small that the company would otherwise not have bothered obtaining a national patent, imposing additional constraints on local businesses and inventors.

   Linguistic inequality: In a WPS, patent applications will only need to be submitted in the accepted languages. Innovators in many countries may risk legal prosecution for violating patents that have never been published in a language they understand. Furthermore, the 'patent language(s)' will become those most desirable for use in research and development, imposing challenges to academic traditions and applied research conducted in countries where the mother tongue is not among the 'patent languages'.

   Weakened position of traditional knowledge: It also seems probable that, in negotiations towards a WPS, strong forces will try to narrow the definition of prior art (the body of information regarded as previously known and thus not patentable). The challenge to developing countries' interests is that to prevent a patent, it is not sufficient that similar knowledge already exists, but there are requirements as to in what form this knowledge is published and made available. This may easily exclude for instance traditional knowledge that is handed down in oral or other informal ways.

   Weaker influence on patent practice: A World Patent Bureau would be a supranational body, beyond national control, and would probably be able to interpret and reinterpret the legal basis for its own competence. It will be very difficult for the less powerful developing countries to influence such a change in practices.

   Increased transaction costs: Introducing law into every area of research, with more licensing, conflicts and court cases as a result, will create increased legal transaction costs also in poor countries, and may thus be a counterproductive step to development.

   The poor are left out: Tvedt concludes that a WPS would have the probable effect of leaving the needs of the poor even less fulfilled than today. With a WPS the world would take one more step towards becoming one global market, and commercial R&D efforts would be geared even more than today towards developing products for the global rich.

Benefits for a few

Only a few probable positive consequences of a WPS were identified by Tvedt's analysis:

   Advanced enterprises in developing countries will gain: For the few technologically sophisticated and globally oriented enterprises that are located in some of the more advanced developing countries, a WPS will have the same positive effect as for other multinational companies, with possible national ripple effects.

   Traditional knowledge globally protected: In a WPS, it would probably not be possible to define prior art nationally, meaning that for instance traditional medicinal knowledge that exists in one continent may prevent companies on other continents from patenting similar cures.

The study finds very little evidence pointing in the direction that a Worldwide Patent System will become beneficial to developing countries. This conclusion also has relevance for small or medium sized companies in developed countries: if they do not have an interest or capacity to enforce their worldwide patent globally, a WPS will probably increase the number of patents they must know about to avoid infringement. This might have a chilling effect on innovation and create transaction costs also in developed countries.

Citation: Morten Walløe Tvedt (2010), 'One Worldwide Patent System: What’s in It for Developing Countries?' Third World Quarterly, Vol 31, No 2, 2010, pp. 277-293.

The article can be obtained by contacting the author, or it can be purchased here.
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The Institute maintains a multi-disciplinary approach, with main emphasis on political science, economics, and international law.

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