Tuesday, April 11, 2006

The WIPO's SCP meeting is starting...

I have been observing with preoccupation the process to arrive to, the proposed contents of, and the compromise that some of the most developed countries seem to have in relation to the Treaty on the Substantive Law of Patents. Now I am in Geneva participating as observer of the Informal Meeting of the WIPO’s Standing Committee on the Law of Patents (SCP) and before starting to write about the deliberations, I think that some considerations need to be made.
The process of negotiation was greatly disturbed by situations like the one presented by the Casablanca meeting, where a selected group was invited by selection but without making clear what criteria was followed to select the participants, and then pretend that the result of that meeting had to be the basis of any future discussion for the whole SCP membership. The only possible outcome of that kind of activity would be, of course, to discredit the work of WIPO and its members. It seems not necessary to add that normally, if there is an understanding that a small group of nations should engage in some sort of preliminary work to expedite the drafting of a treaty, that group must be selected from the totality of members, following some sort of pre-agreed representativity, and with also pre-agreed and clear terms of reference.
From the contents point of view, the committee is sharply divided between a small group of countries that propose to harmonize patent law following the highest standard of protection, the so called group B, and those that affirm that patent law should be adapted to different levels of development and thus the proposed treaty should emphasise flexibilities to suit the less developed countries, grouped in the so called Group of Friends of Development. In this context, probably is time to revisit some of the basic principles of the law of patents and then decide where the balance must rest.
The law of patents was created to benefit society by encouraging innovation and, with that purpose only innovators were allowed to exclude others from the economic gains that could be obtained using the invention. It was not created as a giving eternal and unlimited property rights to the inventor or patent holder and, in addition to the economic analysis that shows that too strong protection stiffens innovation, the logic is quite understandable and simple: even the most genial of the inventors had to build upon the existing science and technology, which were the result of the work, the creativity and the ingenuity of, we can confidently say, the humanity as a whole, which in one way or another contributed to their development from the moment that a human being took a rock to create the first tool. So, the innovator owes more to society that what society owes to the innovator and, accordingly, although for enforcement purposes patents are treated as proprietary rights they are essentially a grant given by the state to somebody with a very specific purpose and, therefore, the state has the right and obligation to establish the conditions and duration of that grant taking primarily into account the fulfilment of the original purpose, which is benefiting society. The process, put it in its simplest terms, consist on temporarily restricting the freedom and possibly the welfare of most members of a society by not allowing the free use of some part of society’s knowledge and endowing into someone the right to exclude others from the economic gains produced by that invention, to create incentives for the creation of more knowledge that in term will benefit society. As any process, the previously mentioned is a dynamic one and by definition measures can be taken to tend to the balance of it but it cannot be perfectly balanced. Thus, it is understandable that sometimes societies might go through periods of substantial imbalance, especially when new technologies emerge, but care must be taken to ensure that the imbalance tilts toward the excess of freedom to use, which can be corrected once the proper assessment on the impact of regulation is made, because if, as it is happening now, the imbalance is tilted toward the right to exclude, which deprives society from important parts of the knowledge that it contributed to create and that it is necessary as foundation of new creations, it is virtually impossible to then deprive right holders from rights that lawfully have acquired.
Another very important feature of the law of patents is that, due to having the duty of looking for the balance between the interests of society and those trying to profit from an invention, the balance by definition must belong to each particular society, which renders any objective of internationally harmonise the law of patents based on the highest standard of protection, of dubious desirability at best or of oxymoronic nature at worst. It should be by now clear that following the balance achieved by one or several highly developed societies, less developed countries will be confabulating against the spirit and purpose of patent law and, in some cases, violating constitutional requirements of granting patents and other intellectual property rights to foster innovation. Moreover, it has to be said that the so-called developed countries have given the current high standard of protection to patent holders, especially non-nationals, only after acquiring the status of developed nations and not as pre-condition for such acquisition.
The current proposal presented by the group B can be defined as an attempt to crystallise via patent law, between other measures, the current levels of development and can also be presented as the group trying to cut off the ladder after they have climbed it and reached the top of the tree. This is not the appropriate time to discuss whether the domestic current patent law of the countries belonging to the group B has achieved the formerly mentioned balance, but there are suggestion that the level of protection that the named group proposes to internationalise is not even adequate for them, and that the current patent law system, defined as broken in some jurisdictions of the group B, is already too tilted in favour of patent holders and it is starting to stiff innovation. It is probably necessary to remember that patent law was not created to protect the profits of patent holders per se and that those profits are only a mean to achieve the end of benefiting society.
It could be argued that it is difficult to understand what brings together the so called group B. The proposal put forward by the group is designed to benefit a very small group of companies of some and not all of the members of the group B and, even if anyone here believes that what benefits big corporations benefits automatically their home countries, there is mounting evidence that the current patent systems on which the group B proposal is based would eventually and not in the very long term hurt the same big companies due to stiffening of innovation.
There are also questions to be raised with respect of the compromise of some of the Group B members with the international rule of law. I am not referring, of course, to the current international security situation and the discussion about whether some of the most developed countries are violating or not international law to solve that situation. The issue here is the continuous forum shifting carried out by some of the most developed countries, which creates a permanent state of flux for the harmonisation of intellectual property rights regulation in general and the law of patents in particular. Special attention needs to be given to the use of trade negotiations and free trade agreements to induce, only to avoid the use of the word to force, level of protection far higher that those negotiated and agreed in international and multilateral forums. What is the purpose of any of the WIPO meetings and potential agreements if then, once signed, will be overruled by bilateral agreements that are product negotiations conducted in highly unequal positions and sometimes under the threat of unilateral trade sanctions of dubious legality in international law? What can be expected from less developed countries if the most developed and sophisticated ones seem to use this sort of agreement only as the platform for the next round of negotiations at bilateral level, and would abandon any activity tending to its effective implementation after the less developed countries had used a great deal of their limited resources to achieve such a treaty? I strongly believe that one of the conditions of development and progress is the rule of law, which in the patents case would bring certainty about rights and obligations to patent holders and allows them to plan accordingly and use their competitive advantage to boost their profits and gains for their stockholders. Therefore, extreme care needs to be taken in not producing a Treaty that less developed countries would sign knowing that their only option would be to not follow its dictates, because the situation for those countries, the patent holders and the international rule of law would be substantially worse that the current one.
I understand the complexities of international negotiations and the sometimes more complex process of arriving to a member-state position, but I think that, opposite to what had been claimed often, it is of benefit of the most developed countries to achieve an agreement that contemplates the needs of the less developed ones. This is not only due to moral reasons, as for example putting forward the interest of millions that are suffering diseases and poverty instead of those of a handful of stockholders who are thinking about the size of their next yacht, but also to sound economic and foreign policy that would try to alleviate the burdens created in developed countries by instability and poverty in less developed nations with their effect on unwanted migration and the continuous spread of diseases, between others.
The positions seem to be as entrenched as ever, so let’s see what result this informal meeting brings…
Very cold in Geneva

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