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SOCIO.

ECONOMIC BENEFITS
OF
INTELLECTUAL PROPERTY
PROTECTION
IN DEVELOPING COUNTRIES

by

Shahid Alikhan
OL - ;a;r)
WORLD INTETLECTUAL
PROPERTY ORGANIZATION

WIPO
RARY
LI B
FOREWORD

Worldwide, and especially in the developing countries,


the relevance of adequate and effective protection of intellectual
property rights is still not fully appreciated. considering that
intellectual property protection has a major impact on all facets
of human progress, there is a continuing need to demystify the
subject of intellectual property so as to make its role in social,
cultural, technological and economic development better
understood by industry, business and the public at large.

It is in this context that I consider Mr. Alikhan,s


contribution, through this book, a major step as he has
encapsulated his vast experience and deep understanding of the
issues involved in the use of the intellectual property system,
especially in developing countries, in an easy to read, direct and
forceful manner, with appropriate facts and figures illustrating
key points and issues in the text. It has been a labor of love for
Mr. Alikhan to write this primer on the importance of the
intellectual property system in a manner that can be appreciated
by a much wider audience than it was hitherto possible.
The book gives a comprehensive overview of all the
issues that can possibly interest the serious reader. In particular,
it should be very helpful to government officials who advise
policy makers on the best approaches to take in developing a
nation-wide action program for harnessing human inventiveness
and creativity for economic, cultural and social progress.

Mr. Alikhan has been intimately involved with


intellectual property issues at the national level as a senior
Indian civil servant, as well as at the international level, for
nearly three decades. It was during his years at WIPO, first as
Director of the Copyright Division, and later, as the
Deputy Director General overseeing cooperation for
development activities of WIPO in all the developing regions of
the world, that the program of assistance to developing
countries took a concrete shape and blossomed into a major
activity, whose relevance and importance have been escalating
with the increasing importance of knowledge-based intangible
assets in this age of rapid technological progress based on
rnodern science and technology. It was with this background
that he was requested to write this book for use by wIPO in its
awareness building and outreach activities.

WIPO, and I, in particular, are indeed deeply indebted to


him for not only having agreed to write this book and to permit
its wide distribution as a WIPO publication, but also for having
done it with such care, caution, and attention to detail.

I wish him all the best in his future endeavors.

Kamil IDRIS
Director General
World lntellectual Property Organization
Geneva, March 9, 2000

1l
TABLE OF CONTENTS

Acknowledgements ......... v
CHAPTER 1

Intellectual Property System-A Catalyst


For Development ............... 1

CHAPTER 2

Intellectual Property-Its Main Branchesl


Its Role And Importance In Socio-Economic
Development......... ....... 10
CHAPTER 3

Economic Value Of Effective Protection


Of Intellectual Property .............41
CHAPTER 4

Protection Of Copyright And Related Rights


In The Digital Era: The Cultural Industry; Its
Contribution To National Economies: Protection
of Folklore And Traditional Knowledge ....50
CHAPTER 5

Global Information Networks, Electronic


Commerce And Intellectual Property..................... 85
CHAPTER 6
Innovation Management And Research And
Development Activity; Importance Of Small
And Medium Enterprises In Its Promotion;
Interaction With National Industrial Property
Offices ........ 107

111
CHAPTER 7

Transfer Of Technology-Its Acquisition


And Licensing.... ........ 114
CHAPTER 8

Industrial Property And Environmentally


Sound Technologies ..... ........... 118
CHAPTER 9

Modernization Of National Intellectual Property


Legislation And Administration; Strengthening
Of The Intellectual Property System For
Technological Development; Strong Patent
Information System; International Protection
Of Intellectual Property: Advantages
For Developing Countries ........... .. 124
CHAPTER 10

Effective Enforcement Of Intellectual


Property Rights .......... 153
CHAPTER 11

Institutional Frameworkl Human Resource


Development And Awareness Building; Teaching
Of Intellectual Property; Inventors'
Associationsl Intellectual Property Institutes ....... 170
CHAPTER 12

Conclusion ........... ...... 185


INDEX .. 193
ABOUT THE AUTHOR. ...I97

1V
ACKNOWLEDGEMENTS

I wish to record my deep gratitude to the Director General


of the World Intellectual Property Organization (WIPO),
Dr. Kamil Idris, for his initiative in proposing that the writing of
this book be undertaken to highlight the importance of effective
protection of intellectual property rights, particularly in
developing countries, for their socio-economic development.

My heartfelt appreciation and warm thanks are also due


to a number of WIPO officials for their helpful suggestions and
information, as also for the assistance so generously provided
by them.

I wish also to acknowledge with grateful thanks, the


assistance I have received by way of information asked for,
being readily provided by my many friends in various
international and national non-governmental organizations, such
4So among others, the International Intellectual Property
Alliance (IIPA), the British Copyright Council (BCC), rhe
International Publishers Association (PA), the International
Publishers Copyright Council (IPCC), the International
Federation of the Phonographic Industry (IFPI), the
International Confederation of Societies of Authors and
Composers (CISAC), the Indian National Association of
Software and Service Companies (NASSCOM), the Business
Software Alliance (BSA), the Indian Performing rights Society
(rPRS).
CHAPTER 1

Intellectual Property System-


A Catalyst For Development

Development is a multidimensional process. It seeks to


create a broadbased sustainable improvement in the quality of
life and standard of living. Economic growth is a necessary,
though not the only, condition for development. In a growing
economy, development can be broadly defined as a reduction,
among others, of unemployment and poverty. A core concern
of development policy, especially in developing countries,
continues to be as to how to increase the availability of
meaningful educational and employment opportunities.

The intellectual property system is one of the


cornerstones of modern economic policy at the national level
and a catalyst for development. It will increasingly become an
important tool for sustainable development of developing
countries, especially the least developed countries, in the
knowledge-based society of this millennium. Therefore,
understanding the legal and economic foundations of the
intellectual property system is a prerequisite for comprehending
its increasing importance and role in national strategies for
Socio-Economic Benefits of IP Protection in Developing Countries

enhancing competitiveness and accelerating socio-economic


development.

Through its ability to create and sustain exclusivity in the


marketplace, albeit for a limited period of time, intellectual
property is increasingly being recognized the world over as an
important commercial asset and a driving force for
technological innovation and progress. It is a key component of
the national infrastructure required for socio-economic growth,
for developing national indigenous technological capacity, and
for generating expolt oppoftunities through enhancement of
enterprise competitiveness. Strong and effective intellectual
property protection is a crucial factor in facilitating technology
transfer as well as in attracting foreign direct investment in
certain sectors of the economy that are vital for sustainable
development.

Since intellectual property results from creative effort


through the use of human intellect, every conceivable effort
must be made to encourage innovative and inventive activity.
Effective protection of intellectual property, through creation,
use and enforcement of exclusive legal rights over it, provides
the necessary incentive for scientific and technological
creativity, facilitates the dissemination and use of new technical
knowledge, and creates a conducive environment for the orderly
exchange of intellectual property based goods and services in
the marketplace.

The promotion of national creative and innovative


activity is the bedrock on which the foundations of national
industrial and economic progress must rest, and to promote it,
adequate and effective protection of intellectual property rights
is a basic precondition. Innovation in technology is moving
very fast and confidence in the intellectual property system is a
powerful stimulus to such innovation. The protection of
intellectual property rights also influences investment decisions.

2
Chapter I IP Systenr-A Catalyst for Development

The protection of these rights is a priority for enterprises eager


and willing to confront the realities of competition. Attracting
investment in a world of hyper competition will become harder
wherever intellectual property protection is not strong or is
ineffective.

A modern and well enforced intellectual property system


is one of the strong imperatives for ensuring that the process of
liberalizing the economic, industrial and trade policies results in
restructuring the industrial and business sector, and in
encouraging small and medium-sized enterprises (SMEs) to use
the intellectual property system as a means for national socio-
economic and technological development.

In the process of national economic reforms, the adoption


and use of an effective intellectual property system that
promotes inventive, innovative and creative activity is in fact a
sine qua non and in the larger national interest. Removal of
barriers and opening up of the national economies of a number
of developing countries, in the last decade and a half of the
20'h century, has already resulted in an unprecedented flow of
funds and investments to such countries. Around
US$425 billion worth of new factories, supplies and equipment
had come to developing countries between 1988 and 1995. In
1995 alone, the flow of private capital into third world countries
totaled US$170 billion. According to the United Nations'
World Investment Report, in 1992 the foreign direct investment
(FDD flows to developing countries increased to around US$38
billion. The World Development Report of the World Bank,
published in September 1998, indicated that FDI in developing
countries was concentrated in a few markets, the major
beneficiaries being China, India, Indonesia and Malaysia, in
Asia, and Argentina, Brazil, Chile, Mexico, and Venezuela in
Latin America. In these and many other developing countries,
the total availability of private international capital and FDI
could have been even higher, but for certain gaps in their
respective national intellectual property systems. The intimate
Socio-Economic Benefits of IP Protection in Developing Countries

link between such investment flows and the level of intellectual


property protection has been empirically established through
numerous studies published in recent years.

The increasing internationalization of corporate activities,


the fast eroding physical barriers to international transactions,
and the growing borderlessness of trade and technology have
thrown up both new challenges and new opportunities. In the
2l't century the emerging new technologies will create not only
new problems but also provide considerable opportunities for
socio-economic development in developing countries. There is
a growing appreciation of the role of intellectual property in
spurring human capital formation, knowledge diffusion, and
knowledge-based technological innovation.

Encouragement to, and facilities for, scientists,


researchers and technocrats to invent, combined with the
innovative spirit of the developing world's industrial enterprises
and business, is a priority need for generation of higher growth
through greater exports. Promotion of inventions and
innovations is the basis of, and fundamental to, the success of
enterprises, be they large, medium or small. Business and
enterprises should be encouraged to consciously promote among
their employees the inventive, innovative and creative spirit,
and to use the intellectual property system as a tool for
development. This encouragement should be provided in a
systematic manner at every stage of the innovation process,
starting from the stage of conception of a new idea for solving a
technical problem through to the development of such an
invention, its testing and ultimately the commercialization of
products and services based on such inventions

Intellectual property protection has acquired increased


prominence at both the national and international levels. Policy
makers, industrialists, entrepreneurs and academics in
developing countries are already paying greater attention to the
importance of effective protection of intellectual property
Chapter I IP Systenr-A Catalyst for Development

assets. There is an increasing recognition that the intellectual


property system provides a balance of interests between the
creators of new technology, who often spend large outlays and
resources in the creation and development of technology, and
the users of that technology who employ it as an important tool
for improving their technological ability and competitiveness in
the marketplace.

A quality-conscious approach to economic management


would generate higher growth and provide greater resources for
social programs. Adequate protection of intellectual property
rights is a factor to be reckoned with in the process of techno-
logy development, technology transfer, and stimulating exports
by capturing new markets and promoting of national creative
endeavor.

It is important to optimize the utilization of the


intellectual property system in technological and economic
competition, which will undoubtedly become more intensive in
the years ahead. International competitiveness can be
maintained only through high quality production incorporating
the latest technologies, and qualitative competitiveness and
growth in trade can ensure adequate and suitable employment
opportunities.

Encouragement of inventive activity is essential in as


many enterprises as are basic to the national economy. It is
necessary to promote knowledge-based gro'urth with greater
concentration on education in order to produce an increasing
reservoir of scientists, technologists, inventors and innovators.
There is a growing realization that a newly industrializing
developing country is not merely a bunch of factories producing
goods and services. In such a country, policy formulation and
action are necessary in all areas which impact not only on
acquiring modern technology and foreign direct investment, but
also which enable its adoption and assimilation in the given
national context, without causing marginalization of the
Socio-Economic Benefits of IP Protection in Developing Countries

workforce. Thus education and training progams and policies


need to be simultaneously developed and deployed for
upgrading of knowledge and skills of the existing workforce and
the new entrants therein, including scientists, researchers and
technocrats.

The effective use of modern emerging technologies as a


factor in promotion of socio-economic development depends
increasingly on the skills of the workforce. The promotion of
knowledge, education and learning is becoming increasingly an
important and inescapable part and necessary adjunct of
economic growth as well as of qualitative competitiveness.

At the same time, it is important that linkages between


industry, research and development institutions, and universities
should be encouraged and strengthened. Industry and
enterprises in the private sector should also be encouraged to
plough much greater funding in research and development.

The main objective of intellectual property rights


protection is to encourage creative, inventive and innovative
activity, thereby providing for the largest number of people,
economically and speedily, the benefit of such activity. Such
encouragement of creative activity requires both the recognition
of the creators, namely, the inventors, innovators and authors, as
also providing a possibility for them to obtain a reward for their
creative endeavor. The creator, whether it be an individual or
an enterprise, has also to be accorded the right to prevent others
from using his/her or its ideas without consent and without
compensation or remuneration being paid to the individual
creator or the concerned enterprise. Failure to do so can only
encourage piracy and counterfeiting.

Through provision ofexclusive rights, the intellectual


property system ensures legal security needed to those scientific
and technical institutions, and to enterprises that wish to avail of
the possibility to encourage, through material resources and
Chapter I IP Systern-A Catalyst for Development

necessary funding, their employees in using their skills in


research and development of worthwhile new ideas that can be
utilized for constantly improving existing products or making
new products.

Certain industrialized countries have, in the post


World War II period, built up their economic and industrial base
and potential through, inter alia,the extensive and intensive use
of the intellectual property system and particularly the patent
system. Likewise, many developing countries, especially in
South East Asia, have developed their manufacturing base and
improved their export performance by making effective use of
the intellectual property system as an instrument in their
economic growth and development strategies.

Even so, there is continuing need to highlight and


emphasize the importance and usefulness of the protection of
intellectual property rights, its linkage with corporate
competitiveness-both domestic and foreign-as well as its role
in fostering socio-economic growth. This needs to be done,
particularly amongst policy makers, in the private and public
sectors, amongst economists, lawyers, administrators, and the
public at large, so that the intellectual property system is
proactively used in the growth process. Internationalization of
trade and globalization of economies should subserve the cause
of equitable growth and human development. In the context of
developing counffies, it is important to lay emphasis therefore,
on socio-economic development, and not just on economic
growth, since the traditional social values and culture will
continue to flourish alongside techno-economic growth, even in
the digital environment where the Internet and electronic
corrunerce are opening up new possibilities for such growth and
development.

It is interesting to note here that when the Member States


of WIPO met in March 1998, to approve the Program and
Budget for the biennium 1998-1999, under its new
Socio-Economic Benefits of IP Protection in Developing Countries

Director General, the delegate of the country host to the


international organizations in Geneva, termed it "a remarkable
quantum leap in its work." The introduction to that Program
summed up what is central to the theme under consideration
here, in the following passage:

"lntellectual property issues and concerns are becoming


increasingly integrated with other global issues; international
cooperation in the field can no longer proceed in isolation from
the broader policy environment. The Trade-Related Aspects of
Intellectual Property Rights GRIPS) Agreement marked the
emergence of intellectual property rights as an issue in
multilateral trade negotiations. Similarly, intellectual property
issues have been brought into debate on the protection and
exploitation of biodiversiry resources, on the development and
transfer of environmentally friendly technology and technology
for environmental protection, on the protection of folklore and
indigenous culture, and on other aspects of economic and social
dettelopment.

Intellectual property, fo, tnany years view'ed by the


international community as a recondite, specialized issue, has
assumed a new centrality. This follows from the sharpened
focus on knowledge-based models oJ'economic development, the
greater understanding of the role of intellectual property in
promoting technological advance and facilitating technology
transfer, and the pressing need for technological solutions to
the common problems confronting humanity. But there is
limited understanding of the practical realities of the
intellectual properry system and, in particular, of how it may be
more effictively used as a key element of coordinated solutions
to the major problems confronting the international
communiry."

Again, later in September 1999, as per an interesting


WIPO document (Al34l3) entitled "Vision and Strategic
Direction of WIPO" presented by the Director General to the
Chapter I IP Systenr-A Catalyst for Development

Assemblies of the Member States, it was stated in his


memorandum thereto that "the more intellectual property
becomes central to economic growth and wealth creation, the
greater will be the challenge of developing the international
intellectual property system in a way that it be instrumental to
social and economic development. In addition, while stressing
the economic benefits of intellectual property creations, it
becomes most necessary to also attribute a rightful place to the
less economically tangible but equally important cultural
aspects, namely the artistic and intellectual pleasure that such
creations bring, enriching our daily life and lasting cultures."

In sum, intellectual property protection is not an end in


itself but a means to an end, and a catalyst in social, cultural and
techno-economic development of developing countries.

9
CHAPTER 2

Intellectual Property-Its Main


Branches; Its Role And Importance
In Socio-Economic Development

Intellectual property comprises of creations of the human


mind, of the human intellect. It consists mainly of two
branches, one being industrial property dealing with
technological inventions, utility models, trademarks for goods
and services, industrial designs, etc.; the other being copyright,
which protects literary, musical, artistic, photographic and
audiovisual works, films, computer progams and software, etc.,
as well as related rights, that is, rights neighboring on copyright
(neighboring rights), namely the rights of performing artists,
producers of phonograms and broadcasting organizations.

The existence of such exclusive rights is also the legal


basis for contractual arrangements between creators or the ones
developing the ideas, on the one hand, and the institutions or
enterprises wishing to use those ideas in the manufacturing
process, on the other.

Industrial property relates to creations borne out of


inventions, which are solutions to technical problems, or

10
Chapter 2IP-Its Main Branches, Role and Importance

industrial designs, which are aesthetic creations determining the


appearance of industrial products. It also relates to trademarks,
service marks, commercial names and designations,
geographical indications (indications of source and appellations
of origin) and to the protection against unfair competition.
While inventions are exploited in industrial plants, trade and
service marks, commercial names and commercial designations
are not only of interest to industry, but also and mainly to
commerce.

Unlike protection of inventions, copyright law protects


only the form of expressions of ideas, not the ideas themselves.
The creativity protected by copyright law is creativity in the
choice and arrangement of words, musical notes, colors, shapes,
etc. Copyright relates in artistic creations such as poems,
novels, music, paintings, cinematographic works, etc.
Copyright law protects the owner of rights in literary and artistic
works against those who "copy" or otherwise take and use the
form in which the original work is expressed by the author.

In most European languages, other than English,


copyright is called author's rights. The expression "copynght"
refers to the making, only by the author or with his
of copies of the concerned literary or artistic
authorization,
work, for example, a book, a sculpture, a painting, a
photograph, a motion picture. The other expression "author's
rights" refers to the person who is creator of the artistic work,
i.e., its author, thereby emphasizing the fact that the author has
certain specific rights in his creation, for instance the right to
prevent a distorted reproduction, which can be exercised only
by him, while other rights, such as the right to make copies, can
be exercised by other persons, for example, a publisher who has
obtained a license to this effect from the author.

Arising out of this difference between inventions and


literary and artistic works, the legal protection provided for each
differs. Protection for inventions gives a right in the

11
Socio-Economic Benefits of IP Protection in Developing Countries

exploitation of an idea, and is short in duration-normally about


20 years. The fact that the invention is protected must also be
made known to the public. There must be an official
notification that a specific, fully described invention is the
property, for a fixed number of years, of a specific owner; the
protected invention must be disclosed in an official register,
open to the public.

Again, among the main branches of the intellectual


property system, whereas copyright does not require protection
through registration, and accrues in literary and artistic works
without any such formality, this is generally not the case where
industrial property is concerned.

Patent legislation and the patent system protects new


inventions. An invention is a new solution to a technical
problem. An invention to be patented should thus be new,
should be non-obvious in the sense that it would not have
occurred to any specialist, had such a specialist been asked to
find a solution to the particular problem; should involve an
inventive step, and should be capable of application in industry
in the sense that it can be industrially manufactured and used.
In other words, an invention, which the patents system seeks to
protect, is a novel idea that permits, in practice, a technological
solution to a specific problem in industry. In short, it must be
new, it must involve inventive step and it must be
an
industrially applicable. Normally, it is the result of research,
and should be economically valuable and usable in industry. An
inventor, be it an individual or an enterprise, has, in filing an
application for registration of an invention, to disclose and
describe it.
The government authority s6nssrnsd-usually the
patent office, generally after the necessary search and
examination, issues a document or a patent that describes the
invention and identifies the inventor or enterprise as the owner.
Thus inventions are protected by patents, also called "patents
for invention."

t2
Chapter 2 IP-Its Main Branches, Role and Importance

The issuance of a patent creates a legal situation in which


the patented invention can normally be exploited, that is, made,
used, sold, imported, only with the authorization of the patentee.
A patent vests in its owner the legal right to prevent others from
performing certain acts with respect to the technological subject
matter within the scope of the patent. While this protection is
limited in time (generally under most laws the term is 20 years
from the filing date), the term of protection, viz. 20 years is
considered a reasonable duration of rights awarded to the
invention to induce him/her or it to invent.

Inventions are distinguished between those that consist of


products and those that consist of processes. An invention that
consists of a new alloy, for example, would be a product
invention. On the other hand, an invention comprising of a new
method or process of making a known or new alloy is a process
invention. These inventions are referred to respectively as a
"product patent" and a "process patent."

It is an illegal act if anyone exploits a patented invention


without the authorization of the owner of the patent. However,
patent laws often provide for exceptions to this principle by
allowing for a patented invention to be exploited without the
patentee's authorization, for example exploitation in the public
interest by or on behalf of the government, or exploitation on
the basis of a compulsory license. A compulsory license is an
authorization to exploit the invention, given by a governmental
authority in very special cases to be defined in the law, and only
where the person or institution wishing to exploit the invention
has been unable to obtain the authorization from the owner of
the patent. The conditions for the granting of compulsory
licenses are also regulated in national laws, which provide for
them. The decision granting a compulsory license has to fix an
adequate remuneration for the patentee. Such a decision may be
subject of an appeal. The TRIPS Agreement in Articles 27.7
and 31 lays down a number of obligations with respect to the
use of a patented invention without the authorization of the

13
Socio-Economic Benefits of IP Protection in Developing Countries

patent owner. Member States of the World Trade Organization


$ruO) have to comply with those requirements, which,
importantly, do not permit the grant of compulsory licenses on
the ground of failure to work, or insufficient working of an
invention, if the protected product is lawfully imported into the
territory of the Member State concerned.

The patent system deals with the most recent technology


and has proved useful in encouraging investment. It not only
protects innovative products but also publicizes the technical
information on which it is based. For technology users this is
significant, as inventions are disclosed in a well-established
documentation and are available to any person desirous of using
them. As such the disclosure provides an important source of
technological information.

The technology disclosed through patents documents


serves to stimulate ideas for further inventions and innovation;
it encourages the efforts of inventors, inter alia, in developing
countries in coming up with even better inventions or inventing
"around" the original. Such indigenous inventions, duly
registered, could well surpass the original in the direction of
industrial application of related technology.

Patents cover every conceivable area of technology from


clips to computers, for example, clamps for car exhaust
mufflers; improved brake systems for bicycles; spare parts for
tractors used in agriculture; electrical switches, etc. These and
many other indigenous technologies can be generated and
exported only if the inventive habit is encouraged by ensuring
that the system of intellectual property protection is effective,
and that the inventor does not have the fear that his idea or his
invention is likely to be imitated and used by others without
compensation to him. Each such invention has a multiplier
effect. It is the basis for further and increasing technical
developments. It is interesting to compare the figures of patent

14
Chapter 2IP-Its Main Branches, Role and Importance

applications filed in some countries including those in some


developing countries as examples.

Recent figures (for 7997 unless otherwise recorded) show


national and European patent applications were in Japan
370,555, United States of America 202,105, Germany 98,267,
Republic of Korea 92,734, United Kingdom 70,742, France
60,l76,Italy 47,777, Sweden 38,702, Netherlands 38,420, Spain
37,53O, Switzerland 36,688, Austria 35,052, Denmark 32,956,
Belgium 32,849, Greece 30,809, China 24,774, Russian
Federation 19,992, Canada 14,096, Australia 13,160,
South Africa 11,050 (1995), India 10,155, Singapore 8188,
New Zealand 6457, Malaysia 6451, Brazil 6019, Argentina
5859, Thailand 5443, Mexico 4193, Poland 3644, Philippines
3565, Israel 2886, Venezuela 2524, Chile 1947 (1996),
Romania 1804, CzechRepublic 1664, Hungary 1625, Colombia
1259 (1996), Egypt l2l0
(1996), Saudi Arabia 1058,
Bulgaria 932, Turkey 808, Peru 8(X, Pakistan 798 (1996),
Islamic Republic of kan 418, Viet Nam 396, Morocco 327
(1996), Mongolia 189, Trinidad and Tobago l7l, Cuba 140,
Sri Lanka 123, Barbados 43, Kenya 32 (these statistics do not
include designations under the Patent Cooperation Treaty (PCT)
and those in other regional organizations).l

While some of the developing countries mentioned above


have largely non-resident applications for patents, an increasing
number of them have encouraged national inventors and
invention promotion, and have registration of inventions by
residents in four to five digit figures in, for example, the
Republic of Korea, China, Brazil, South Africa and India.
However, in respect of grant of patents, there is, in many
developing countries, a very sizable backlog of applications

' Fo, u detailed breakdown of these figures, see WIPO publication on


Industrial Property Stati stics (IP/STAT/ 1 9 97 I A).

15
Socio-Economic Benefits of IP Protection in Developing Countries

which needs to be cleared much more expeditiously, precisely


for encouraging greater invention promotion.

It is clear that developing countries, by and large, have to


develop such kind ofsophistication that needs to be encouraged
in order to be ahead of others in developing their own brands of
technology, even high technology, on an increasing scale,
instead of looking for its transfer from abroad. It is essential
that developing countries should really aim, with the help of the
intellectual property system, to move from being largely
importers of technology to becoming its producers and
exporters. Industrial property protection is critical for quality
development of knowledge-intensive industries and enterprises.

One of the many myths associated with the patent system


by the uninitiated is that a patent is of little benefit other than to
provide exclusive rights to the patentee. The value of having
the complete document available to the public, including a
comprehensive description of the new technology, is not always
known or fully appreciated. Incidentally, patent applications
worldwide had risen by 32Vo from 1.25 million to 1.65 million
annually even in the five years ending 1990. Furthermore, with
more than 65,000 applications published under the Patent
Cooperation Treaty (PCT) every year, the PCT system (see
pages 95-98) also makes a significant contribution to the wealth
of technological information disclosed and made available to
the public. In 1999, the number of PCT International
applications received at the lnternational Bureau of WIPO was
74,023.

Inventions are documented and disclosed through patent


documents each year. About 3.5 to 4 million patents are in
force in the world. Certainly not all the several million
registered patents in the world can be major technological
breakthroughs. A sizable number encompass just "incremental"
inventions consisting of small improvements to products and
processes that increase their efficiency and marketability and

16
Chapter 2 IP-Its Main Branches, Role and Importance

are built "around," as mentioned earlier, the technological


information obtained from existing documents. Valuable
technology is not always "high tech" nor does it always have to
come from abroad.

Technological innovation is the key to economic growth


and social prosperity, and patent information is the source of
technological information that industrial research organizations
have at their disposal. Patent documents, notably through their
disclosure of inventions, are a source of the state-of-the-art
technological and commercial information invaluable in the
development of creative new technologies that could help the
developing countries to get increased access to foreign markets.

Industrial property documents are an excellent source of


the state-of+he-art in most technological fields. Research and
development (R&D) efforts have to take cognizance of this vast
amount of intellectual wealth and R&D planning must use this
wealth systematically.

ln general, one could say that until recently there has


been a failure to recognize the existence of technological
information in patent literature. The patent system has for too
long been regarded purely as a legal system which generates
legal documents that are occasionally referred to a court in order
to settle a dispute concerning the boundaries or scope of
privately held property rights.

Too many people have generally believed that once a


patent has been granted, it belongs exclusively within the realm
of the patentee and that the description of the technology in the
patent serves no other purpose than to define the patentee's
rights.

The role of
patents as an up-to-date source of
technological information and as a tool for the transfer of
technology has in the past been largely ignored. In an age

17
Socio-Economic Benefits of IP Protection in Developing Countries

where information is being viewed as an important resource,


countries which are looking to maximize their industrial
potential cannot afford to merely view the patent system from a
narrow legal perspective.

Utility models also called "petty patents" or "utility


innovations" differ from inventions for which patents are
granted, in that a utility model involves either only novelty but
no inventive step or the inventive step required is smaller than
in the case of an invention for which a patent for invention is
available. The maximum term of protection provided in the law
for a utility model is normally shorter than for a patent for
invention. The fees required for obtaining and maintaining the
right in respect of utility models are generally lower than those
applicable to patents. The procedure for obtaining protection
for a utility model is also generally simpler and shorter than that
for a patent for invention.

In the context of consideration of patents and patentable


subject matter, the TRIPS Agreement in its Article 27.3(b)
mentions that members shall provide for protection of new
plant varieties either by patents or by an effective sui generis
system or by any combination thereof. Plant varieties
protection is ultimately linked to, and is a form of industrial
property rights. However, the protection of new varieties of
plants through a special system, needs also to be classified with
industrial property, hence its inclusion here. Protection of plant
varieties has certain features in common with patents for
industrial inventions. Both forms of protection grant to their
holders a form of exclusive right so as to provide an incentive to
pursue innovative activity.

In many countries, the system of protection of new


varieties of plants is dealt by the Ministry of Agriculture, and in
recent years has acquired importance, since policy makers are
becoming increasingly aware of its value in the development of
agriculture as also in the production of food, fiber, and

18
Chapter 2 IP-Its Main Branches, Role and Importance

renewable raw materials. This awareness is fostered by the


trend towards privatization of the plant variety and seed sector.
New varieties of plants giving a higher harvested yield or
providing resistance to plant pests, diseases, etc., are an
essential factor in increasing productivity and product quality.

Breeding new varieties of plants requires investment in


terrns of skill, labor, material resources and funds, and may take
many years. A new variety, once released, may in many cases
be readily reproduced by others so as to deprive its breeder of
the opportunity to profit adequately from his investment.
Granting to a breeder of a new variety, the exclusive right to
exploit his variety, both encourages him to invest in plant
breeding and contributes to the development of agriculture,
horticulture and forestry.

The relevant international treaty in this field is the


International convention for the Protection of New varieties of
Plants, which was signed in Paris on December 2, 1961, and
subsequently amended in 1972, 1978 and 1991. The
corresponding Union, the International Union for the Protection
of New Varieties of Plants (LIPOV) had 44 states as members in
January 2000. Some additional 70 countries have laws or draft
laws conforming with the UPOV Convention, a large majority
of these being developing countries. Although Article 27.3(b)
of the TRIPS Agreement allows a fair degree of freedom to
states in designing their plant variety protection system (subject
to the requirement of effectiveness), the UPOV Convention has
become the standard accepted by most states.
The Director General of WIPO is also the Secretary General of
UPOV.

To be eligible for protection, a plant variety must fulfill


certain basic conditions. It must be clearly distinguishable from
any other variety whose existence, at the time of application, is
a matter of common knowledge; it must be sufficiently uniform,
subject to the variation that may be expected from particular

19
Socio-Economic Benefits of IP Protection in Developing Countries

features of its reproduction by seeds or vegetative propagation;


it must be stable in its relevant characteristics, that is, remain
unchanged after repeated reproduction or propagation or, in the
case of a particular cycle of reproduction or propagation, at the
end of each such cycle; it must be new in the sense that it must
not have been commercialized prior to certain dates established
by reference to the date of application. It must also be given a
variety denomination, that is, a name whose use will be
mandatory in commercial transactions with the variety, even
after the termination of protection.

The effect of protection is that the authorization of the


right holder will be required for certain acts of exploitation of
the variety, typically and as a minimum, for the production for
purposes of commercial marketing, the offering for sale and the
marketing of propagating material (seeds, cuttings, young
plants, etc.) of the protected variety and certain other varieties.
The 1991 Act of the UPOV Convention provides, in particular,
that the authorization of the right holder would also be required
in respect of harvested material (for instance rice for
consumption), but only if the right holder has not had
reasonable opportunity to exercise his right in relation to the
corresponding seeds or propagating material.

This right rarely implies that the breeder enjoys a


monopoly for it is in the nature of agricultural production that
varieties must be used by many farmers. The right could,
therefore, be considered as one to assist in establishing
partnerships. In the case of specialized crops, such as
ornamental plants (roses for example), the breeder will endeavor
to organize production and trade in such a way that both himself
and his partners will benefit from the exploitation of the variety.
In the case of most food crops, suppliers could provide quality
seed to farmers.

The right granted to the breeder is subject to important


limitations. Firstly, most countries provide an exception to the

20
Chapter 2 IP-Its Main Branches, Role and Importance

breeder's right under which farmers may freely produce seed for
use on his own farm ("farmer's privilege"). Like most other
intellectual property rights, the breeder's right does not extend
to activities done privately and for non-commercial purposes.
The exclusive right includes only production for commercial
marketing; it does not extend to production of propagating
material that is not for commercial marketing. Hence
production of seed, for example, by a farmer for subsequent
sowing on his own farm, falls outside the breeder's protection.

Secondly, it is in the nature of plant breeding that the


most efficient strategy for creating a new variety, adapted to a
given agro-ecological environment, is to cross two superior
plants, typically from two recent varieties adapted to the same
environment, and to select from the progeny one or more
varieties that enable agriculture at large to take another step up
in performance (in terms of yield, quality, adaptation, resistance
to pests, diseases, abiotic stresses, etc.). The plant variety
protection system reflects this by providing that a protected
variety must be freely available as an initial source of variation
- as a genetic resource - for the creation (and subsequent
exploitation) of new varieties. This principle is usually referred
to as "breeder's exemption" and is a cornerstone of the UPOV
system. The "breeder's exemption" represents a trade-off; in
return for free access to the starting material, the breeder of a
new variety accepts that his variety, together with all
improvements built into it, becomes freely available as starting
material for others.

Having referred to patents, utility models or petty patents,


and to the protection of new plant varieties, it may be mentioned
that while patents protect the innovative technical improvement
in a process or product, the novelty ofits shape as perceived by
the human eye is protected by a registered industrial designs
right. The external appearance of goods in the retail market has
an important role in persuading consumers to purchase a
particular brand of merchandise. Manufacturers often times rely

2t
Socio-Economic Benefits of IP Protection in Developing Countries

upon the manner in which a technology is packaged, in order to


maintain their turnover and to retain hard-earned markets. The
appeal to the eye may be crucial to market success or failure of
a product.

An industrial design is the ornamental or aesthetic aspect


depending on the shape, pattern or color of an article. It must be
a useful article reproducible by industrial means; this is the
essential purpose of the design, and is why it
is called
"industrial"; it must be new or original. The requirements of
novelty or originality are incorporated in Article 25.1 of the
TRIPS Agreement. The duration of protection shall amount to
at least 10 years.

Industrial designs may be applied to any article in order


to protect their aesthetic shape, and have almost a similar
economic function as trademarks. They protect the
characteristics of products, which directly influence the decision
of consumers. lndustrial designs are of prime importance for
the consumer industry, e.g., textiles, cosmetics, tobacco, etc.

To be registered, a design must be novel and materially


different from other designs for the same type of article.
Protection of an industrial design safeguards the registered
owner from its being copied without the registered owner's
authorization; the copies or imitations made without such
authorization cannot, as in the case of patents and trademarks,
be lawfully sold. As in the case of patents and trademarks, the
registration of industrial designs helps engender technical and
commercial information much of which is available in the form
of readily accessible databases, that could be consulted by those
planning to produce new product designs. By the end of 7996,
the number of registered industrial designs in force worldwide
was about 1.5 million.

As regards the system of international registration of


industrial designs, this is dealt with at page 147 in Chapter 9.

22
Chapter 2 IP-Its Main Branches, Role and Importance

As far as trademarks are concerned, any sign, or any


combination of signs, capable of distinguishing the goods or
services of one undertaking from those of other undertakings
shall be capable of constituting a trademark (cf. Article 15.1 of
the TRIPS Agreement). The same Article provides that such
signs, in particular words including personal names, letters,
numerals, figurative elements and combination of colors as well
as any combination of such signs, shall be eligible for
registration as trademarks. The said Agreement also sets out in
Article 16, the rights conferred on the owner of a trademark and
the protection to be given in respect of well-known marks.

The initial registration and each renewal of such


registration of a trademark shall be for a term of no less than
seven years (under Article 18 of the TRIPS Agreement).
However, under the Trademark Law Treaty (TLT) it is 10 years.
The registration of a trademark shall be renewable indefinitely,
and is not limited in time provided the registration is renewed.

The trademark enables its owner or enterprise to build up


a reputation for the goods offered in relation to that trademark,
and compels the owner of the mark to strive to maintain and
improve the quality of the goods or services offered under the
mark. The exclusive right of the owner of a mark precludes
others from using it. Marks have an increasingly important role
in a country's commerce and trade as they stimulate economic
progress.

In 1996, the number of trademarks and service marks


registered and renewed worldwide was around 1.3 million; in
addition there were international registrations and renewals
under the Madrid Agreement and its Protocol corresponding to
about 226,000 national registrations and renewals. Including
registrations under the Madrid Agreement and its Protocol,
about the equivalent of 13.25 million registrations of marks
were in force at the end of 1996.

23
Socio-Economic Benefits of IP Protection in Developing Countries

With the number of trademark applications, which are


bound to increase, both as a result of the national economic
reform program and with international trade liberalization, the
ways of reducing backlogs need to be looked into, if necessary
through temporary additional human resource assistance, until
the computerization programs are completed. Reducing the
backlog and prompter service to applicants for trademark
registration willhelp retain and build upon national and
international confidence in the system in developing countries.
Trademarks are important in business and need to be defended
against infringement and misuse.

A trademark is the main instrument for noting the


difference, especially when the difference between the design
and purpose of the product in question is negligible (for
example, cigarettes, soft drinks, etc.). Trademark protection
strongly influences the goodwill of the buyer; the trademark
once it gets hold of a customer's mind is the guarantee of its
quality. Trademarks thus serve to further the commercial
interest of an enterprise and are an aid to image building of that
enterprise.

Trademarks play an important role in international trade


and are becoming increasingly important in our competitive
world. Growing industrialization in developing countries has
allowed competing manufacturers to offer a variety of goods in
the same category to consumers.

Consumers can thus choose between various competing


goods and distinguish the product of one producer from another.
Trademarks are identifiers that enable buyers to distinguish the
product of one producer from another. They are virtually the
marketing link of a company with the consumers.

International protection of well-known marks is


provided for in Article 6bis, paragraph (1), of the Paris

24
Chapter 2IP-Its Main Branches, Role and Importance

Convention for the Protection of Industrial hoperty (Paris


Convention), to which 157 States are at present party, and in
Article 16, paragraphs 2 and 3, of the TRIPS Agreement, by
which so far 135 States are bound.

According to Article 6bis of the Paris Convention,


protection accorded to well-known marks is a protection against
"the registration and use of a trademark which constitutes a
reproduction, an imitation, or translation, liable to create
confusion, of a mark considered by the competent authority of
the country of registration or use to be well known in that
country."

Protection in Article 6bis does not extend to service


marks. By virtue of the TLT, however, the provisions of the
Paris Convention relating to trademarks are extended to service
marks.

Protection extends to registration or use in respect of


"identical or similar goods." This feature is usually known as
the "principle of specialty," a principle of trademark law under
which protection for a trademark extends only to the same or
similar goods as are covered by the registration or use of the
trademark. Article 6bis is, however, silent on what constitutes a
well-known mark. The appreciation of whether a mark is well
known is left to the "competent authority" of the country
concerned.

The provisions of Article 6bis of the Paris Convention are


confirmed and extended by Article 16, paragraphs 2 and 3, of
the TRIPS Agreement.

Article 16.2 builds on the work of the TLT by extending


the protection of Article 6bis of the Paris Convention to well-
known marks. Aticle 16.2 of the TRIPS Agreement provides a
non-exhaustive guide to competent authorities of States for
appreciating whether a mark is well known. In this respect, it

25
Socio-Bconomic Benefits of IP Protection in Developing Countries

provides that in "determining whether a trademark is well


known, Members shall take account of the knowledge of the
trademark in the relevant sector of the public, including
knowledge in the Member concerned which has been obtained
as a result of the promotion of the trademark."

Article 16.3 of the TRIPS Agreement provides for


protection extending beyond the normal protection under the
principle of specialty. It provides for the protection under
Article 6bis of the Paris Convention to "apply to goods and
services which are not similar to those in respect of which a
trademark is registered" on two conditions: first, "that the use of
the mark in relation to those other goods or services would
indicate a connection between those other goods or services and
the owner of the famous mark," and, secondly, "that the
interests of the owner of the registered mark are likely to be
damaged by such use."

While an international obligation to accord protection to


well-known marks exists, there is, as earlier mentioned, no
established treaty definition of what constitutes such a mark.
This is left to the appreciation of the competent authority in the
country where protection is granted. As noted, however, Article
16.2 of the TRIPS Agreement provides some guidance as to the
criteria that such a competent authority must take into account
in forming its appreciation. In addition, such criteria have been
developed in national case law and regulatory practices and
decisions around the world.

Since the adoption by the Paris Union Assembly and the


WIPO General Assembly in September 1999, of a
Recommendation concerning provisions on the protection of
well-known marks, additional elements to determine whether a
mark is well known have been agreed upon by Member States.

The Recommendation is intended to clarify, consolidate


and supplement the existing international protection of well-

26
Chapter 2 IP-Its Main Branches, Role and Importance

known marks as established by the Paris Convention and the


TRIPS Agreement. It includes detailed provisions regarding the
determination of whether a mark is a well-known mark in a
Member State (Article 2), as well as remedies in cases of
conflicts between well-known marks and other marks (Article
4), conflicts between well-known marks and business identifiers
(Article 5), and conflicts between well-known marks and
domain names (Article 6). The aim of these provisions is to
facilitate the application of the existing international standards
by the competent authorities of Member States.

Pursuant to the Recommendation "each Member State


may consider the use of any of the provisions adopted...as
guidelines for the protection for well-known marks."

The provisions will benefit developing countries in that a


mark shall be considered by a Member State to be a well-known
mark, when the mark is determined to be well known in at least
one relevant sector of the public in the Member State (Article
2(2)(b)). The Recommendation goes even further by stating
that "a Member State may determine that a mark is a
well-known mark where the mark is known (and not only well-
known) in at least one relevant sector of the public in the
Member State" (Article 2(2)(c)).

Relevant sectors of the public shall include (but not be


necessarily limited to) actual and/or potential consumers,
persons involved in channels of distribution, business people,
dealing with the type of goods and/or services to which the
mark applies (Article 2(2)(a)).

Member States shall not require that the mark is well


known, or that the mark has been registered, in any jurisdiction
other than the Member State (Article 2(3)(ii)). Neither shall a
Member State require that the mark is well known by the public
at large in the Member State (Article 2(3)(iii)).

27
Socio-Bconomic Benefits of IP Protection in Developing Countries

The Recommendation sets out a non-exhaustive list of


factors that the competent authority of a Member State shall
take into account in determining whether a mark is a well-
known mark. In addition to any circumstances from which it
may be inferred that the mark is well known, the competent
authority shall consider information concerning the degree of
knowledge or recognition of the mark in the relevant sector of
the public, the duration, extent and geographical area of any use,
promotion (including advertising or publicity), registration of
the mark, the record of successful enforcement of rights in the
mark, the value associated with the mark (Article 2(1)).

Article 6 of the Recommendation relates to conflict


between well-known marks and domain names and states that"a
domain name shall be deemed to be in conflict with a well-
known mark at least where that domain name, or an essential
part thereof, constitutes a reproduction, an imitation, a
translation, or a transliteration of the well-known mark, and the
domain name has been registered or used in bad faith."

Another category in industrial property concerns


commercial names, trade names or designations. A trade
name, according to Article 8 of the Paris Convention, must be
protected without the obligation of filing or registration,
whether or not it forms part of a trademark. Protection
generally means that the trade name of one enterprise may not
be used by another enterprise either as a trade name or as a
trademark or service mark, and that a name or designation
similar to the trade name, if likely to mislead the public, may
not be used by another enterprise.

Again among commercial designations, there is another


kind of distinctive sign in trade, viz. geographical indications.
The expression "geographical indications" covers distinctive
signs, both in respect of "indication of source" and "appellations
of origin." The expression was introduced in international
parlance by WIPO at the end of the 1980s as a term covering

28
Chapter 2 IP-Its Main Branches, Role and Importance

both indications of source and appellations of origin. The Paris


Convention in its Article 1 mentions that the protection of
industrial property has as its object, inter alia, indications of
source or appellations of origin.

An indication of source is an expression or sign


indicating that a product or service originates in a country or
region or specific place. As a rule, the use of false or deceptive
indications of source is unlawful.

An
appellation of origin is constituted by the
denomination of a country, a region or a specific place which
serves to designate a product originating there, the characteristic
qualities of which are due exclusively or essentially to the
geographical environment. The use of an appellation of origin
is lawful only for certain persons or enterprises located in the
geographical area concerned and only in connection with
specific products originating.

The TRIPS Agreement specified and formally


incorporated this term in an international agreement, and gave a
broader definition of geographical indication than the definition
of appellations of origin contained in the Lisbon Agreement for
the Protection of Appellations of Origin and their International
Registration (1958) administered by WIPO. The TRIPS
Agreement in its Articles 22to 24 establishes certain obligations
as concerns protection of geographical indications, which are
defined as indications which identify goods as originating in the
territory of a Member, or a region or locality in that territory,
where a given quality, reputation or other characteristics of the
goods concerned are essentially attributable to its geographical
origin.

In relation to all the above-mentioned rights, i.e.,


trademarks, service marks, well known marks and geographical
indications, a number of new issues have arisen in the context of
the Internet and electronic commerce. One of these issues

29
Socio-Economic Benefits of IP Protection in Developing Countries

concerns the use of domain names to identify and locate, inter


alia, enterprises on the lnternet.
Domain names are a simple form of Internet addresses,
designed to serve the function of enabling users to locate
websites on the Internet in an easy manner. Domain names may
be registered in the generic topJevel domains (gTLDs) or in the
country code topJevel domains (ccTLDs). Domain names were
initially intended to perform the technical function of permitting
connectivity between computers through the Internet. But
because domain names are easy to remember and use, they have
acquired significance as identifiers used in commerce and have
come into conflict with the system of commercial identifiers
that existed before the arrival of the Internet and that are
protected by intellectual property rights, namely, trademarks.
While the trademarks system is administered by a governmental
authority on a territorial basis and gives rights to a trademark
holder that can be exercised within the specific territory, the
domain names system is usually administered by a non-
governmental organ ization without functional limitation within
a specific territory, since domain names give rise to a global
presence on the Internet.

The tension between domain names and intellectual


property rights has led to numerous problems that raise
challenging policy questions. These policy questions have new
dimensions that are a consequence of the intersection of a
global, multipurpose medium, the Internet, with systems
designed for the physical, territorial world. This tension has
been exacerbated by a number of bad faith practices that have
been used by some parties to exploit the lack of connection
between the purposes for which the domain name system was
designed and those for which intellectual property rights
protection exists. These practices include the deliberate,
abusive registration by these parties, as domain names for
themselves, of well-known marks and other trademarks of other
persons or enterprises ("cybersquatting"), in the hope of being
able to sell the domain names to the owners of those marks, or

30
Chapter 2 IP-Its Main Branches, Role and Importance

simply to take unfair advantage of the reputation attached to


those marks. The conflicts between domain names and
trademarks have another dimension in that the normal
territorially based judicial system cannot always provide a
solution to conflicts based on a global dimension.

A mechanism should be introduced whereby the owner of


a famous or well-known mark can obtain an exclusion in some
or all gTLDs for the name of the mark where the mark is
famous or well-known on a widespread geographical basis and
across different classes of goods or services. The effect of the
exclusion would be to prohibit any person other than the owner
of the famous or well-known mark from registering the mark as
a domain name. The exclusion mechanism gives expression in
cyberspace to the special protection that is established for
famous and well-known marks in the Paris Convention and the
TRIPS Agreement. Since an exclusion would cover only the
exact name of the famous or well-known mark, and since
experience shows that "cybersquatters" typically register many
close variations of famous or well-known marks, an exclusion,
once granted, should give rise to an evidentiary presumption in
the administrative procedure. The effect of the evidentiary
presumption would be to place the burden of proving
justification for the use of a domain name on the domain nilme
holder, where the domain name is identical or misleadingly
similar to the famous or well-known mark, and the domain
name is being used in a way that is likely to damage the
interests of the owner of the mark.2

In July 1998, WIPO started an extensive international


process of consultations ("the WIPO Internet Domain Name

2 Cf. "The Management of Internet Names and Addresses: Intellectual


Property Issues," Report of the WIPO Internet Domain Names Process
http : I lW I PO2.W I P O.int. April30, 1999.

31
Socio-Economic Benefits of IP Protection in Developing Countries

of the WIPO Process was to make


Process").3 The purpose
recorlmendations on certain questions arising out of the
interface between domain names and intellectual property
rights. After consideration of comments received on an Interim
Report published in December 1998, WIPO published a final
Report on April 30,1999. The final Report recommended:

(i) the adoption of a number of improved, minimum "best


practices" for registration authorities ("registrars")
registering domain names in the gTLDs, intended to
reduce the tension that exists between domain names
and intellectual property rights;
(iD a uniform dispute-resolution policy under which an
administrative dispute-resolution procedure is made
available for domain name disputes in all gTLDs;
(iii) that, prior to the introduction of any new gTLDs, a
procedure should be established whereby the owner of
a famous or well-known mark can obtain an exclusion
in some or all gTLDs for the name of the mark where
the mark is famous or well-known on a widespread
geographical basis and across different classes of
goods or services; and
(iv) that, insofar as intellectual property is concerned, it is
believed that the introduction of new gTLDs may be
envisaged on the condition that the recommendations
of the final Report with respect to improved
regisfiation practices, dispute resolution and an
exclusion mechanism for famous and well-known
marks are adopted, and on the further condition that
any new gTLDs are introduced in a slow and

3 Cf. The Report of the WIPO Intemet Domain Name Process, which
examines many aspects of the issues that have arisen as a consequence
of the tension between the domain name system (DNS) and the system
for the registration and protection of trademarks, is available at
http : IIe commerce.wipo.int

32
Chapter 2 IP-Its Main Branches, Role and Importance

controlled manner that allows for experience with the


new gTLDs to be monitored and evaluated.

The Report of the WIPO Internet Domain Name Process


was sent for consideration to the Interim Board of Internet
Corporation of Assigned Names and Numbers (ICANN) in
Aprit 1999. The Report was also presented to WIPO's Member
States at their General Assemblies in September 1999. The
Member States expressed their broad support for the WIPO
Internet Domain Name Process and its recommendations, and
indicated that WIPO should continue its work in this area.

The evidence shows that the experience of the last five


years in gTLDs has led to numerous instances of abusive
domain name registrations and, consequently, to consumer
confusion and an undermining of public ffust in the Internet. It
has also led to the necessity for intellectual property owners to
invest substantial human and financial resources in defending
their interests. This arguably wasteful diversion of economic
resources can be averted by the adoption of the improved
registration practices, administrative dispute-resolution
procedure and exclusion mechanism recoflrmended in the Final
Report of the WIPO Process.

In view of past experience, intellectual property owners


are very apprehensive about the introduction of new gTLDs and
the possible repetition in the new gTLDs of that experience.

ICANN has, in a series of meetings, considered the


recommendations of the WIPO Report and has implemented
many of them (i.e., improved registration practices for domain
names and a uniform dispute-resolution policy), while still
considering the questions of whether to add new gTLDs and the
need for protection of famous and well-known marks.

As concerns the protection of layout designs


(topography) of integrated circuits (in Article 35 of the

-a
JJ
Socio-Economic Benefits of IP Protection in Developing Countries

TRIPS Agreement), the type of protection for this is relatively


new. Large-scale integration of a number of electrical functions
in a very small component became possible quite recently as a
consequence of advances in semi-conductor technology.
Integrated circuits are creations of the human mind. They are
often the result of enormous investment including in terms of
highly qualified experts. There is need for the creation of new
layout designs which reduce the dimensions of existing
integrated circuits as also increase their functions. The smaller
the integrated circuit, the lesser the material required for its
manufacture and the smaller the space necessary to
accommodate it. Integrated circuits are used in a wide range of
products, including television sets, watches, data processing
equipment, etc,

On May 26, 1989, under the auspices of WIPO, the


Treaty on Intellectual Property in Respect of Integrated
Circuits was adopted in Washington, D.C., United States of
America. The protection envisaged under the Treaty, as
modified in the TRIPS Agreement, is the prohibition, for a
period of at least 10 years, of reproducing, importing, selling or
otherwise distributing for commercial purposes, of a protected
layoutdesign or an integrated circuit in which a protected
layout-design is incorporated, or an article incorporating such an
integrated circuit only insofar as it continues to contain an
unlawfully reproduced layout-design.

Insofar as protection against unfair competition is


concerned, under Article lObis of the Paris Convention, such
protection is against honest practices in commerce or industry.
In the context of industrial property protection, acts of unfair
competition are those that create confusion with the goods or
the industrial or commercial activities of a competitor; false
allegations in the course of trade that discredit the goods or the
industrial or cotrunercial activities of a competitor; or yet,
indications or allegations, the use of which in trade is likely to
mislead the public as to the characteristics of the goods.

34
Chapter 2 IP-Its Main Branches, Role and Importance

The TRIPS Agreement in its Article 39 provides that in


the course of ensuring effective protection against unfair
competition as provided in Article lObis of the Paris
Convention, Member States shall protect undisclosed
information and shall provide natural and legal persons with the
possibility of preventing information lawfully within their
control from being disclosed to, acquired by, or used by others
without their consent in a manner contrary to honest commercial
practices so long as such information: (a) is a secret in the sense
that it is not, as a body or in the precise configuration and
assembly of its components, generally known among or readily
accessible to persons within the circles that normally deal with
the kind of information in question; (b) has commercial value
because it is secret; (c) has been subject to reasonable steps
under the circumstances, by the person lawfully in control of the
information, to keep it secret.

Insofar as copyright is concerned, the legal protection of


literary and artistic works prevents the unauthoized use of the
expression of ideas. The duration of protection is much longer
than is the case in respect of protection of industrial propetty.
Also the copyright law in most countries is simply declaratory,
i.e., it may state that the author of an original work has the right
to prevent others from copying or otherwise using his work.
Under copyright law, a public register of works protected by
copyright is not necessary.

In the field of copyright, creative intellectual activity is


encouraged by according to the authors, as creators of literary
and artistic works, the exclusive rights in them. These rights
also provide a legal basis for contractual
uurangements/agreements between the author and the producer
or distributor of the expression of the author's ideas, whether it
be in the form of a book or a play or music performance in a
theater or other public place or as an audio or visual recording
or a program broadcast by radio or television.

35
Socio-Economic Benefits of IP Protection in Developing Countries

Copyright protects literary and artistic works, which


means "every production in the literary, scientific and artistic
domain, whatever may be the mode or form of its expression."
It is, therefore, a very broad concept, which covers every
original work of authorship, irrespective of its literary or artistic
value or merit. For example, it includes literary works such as
novels, short stories, poems, other writings, computer programs,
instruction manuals, catalogues; dramatic works, including
plays, scripts, scenarios and others works intended to be
performed such as choreographic works; musical works
including both light or serious scores, or melodies, operas,
works for orchestra; works of art including paintings,
sculptures, engravings, maps, drawings (sketches, architectural
drawings); photographic works (portraits, landscapes); and
audiovisual works including feature films, documentaries,
television programs, newsreels, etc.

In the national laws of some countries, generally


following the colrunon law tradition, protection under the
national copyright legislation also covers certain so-called
neighboring rights or rights neighboring on the rights in literary
and artistic works viz., the rights of performers, producers of
phonograms and broadcasting organizations.

Protection of authors' works encourages them to create.


Such protection applies to all types of works, including school
and university textbooks. In addition, the investment needed for
filmmaking, book printing, book publishing, record
manufacturing, etc., will be more easily available if effective
protection exists. Thus, copyright protection is often
indispensable for encouraging the necessary investments, and as
an eminent publishing and copyright expert put it, "copyright is
a
the trading system for works of the mind."

o Clire Bradley, former Chief Executive of the United Kingdom


Publ i shers' Association.

36
Chapter 2 IP-Its Main Branches, Role and Importance

Encouragement of creativity in literary and artistic works


by its effective protection through modernized copyright, as in
the case of inventions and innovations through patents, is also
an important contributory factor in socio-economic and cultural
development.

The list of protected works under copyright, as given in


Article 2 of the Berne Convention for the Protection of Literary
and Artistic Works, does not limit the modes or forms of
expression which are protected by copyright law. It is not an
exhaustive list. Other modes or forms of expression of works in
the literary, scientific and artistic domain, not included in the
list, are protected also by many copyright laws.

Computer programs, for example, are thus protected


under the copyright laws of a number of countries, including
developing countries, and under the TRIPS Agreement.

Article 10.1 of the TRIPS Agreement provides that


computer programs, whether in source or object code, shall be
protected as literary works. A computer program both is and
does, as a specialist once aptly explained. It is a set of
instructions, which controls the operations of a computer in
order to enable it to perform a specific task such as the storage
and retrieval of information. A computer program helps in
transmitting information and instructions, produced by one or
more authors but, in its final "mode or form of expression," it
can be understood directly only by a machine-the computer.

Another, recent example of a type of work not listed in


Article 2 of the Berne Convention but which is included in the
notion of a creation in the literary, scientific and artistic domain,
is multimedia productions. There is a consensus that the
combination of sound, text and images in a digital format,
which is made accessible by a computer program, embodies an

37
Socio-Economic Benefits of IP Protection in Developing Countries

original expression of authorship sufficient to justify the


protection of multimedia productions under copyright.

The right of the copyright owner to prevent others from


making copies of his works is the most basic right under
copyright. The right to control the act of reproduction is the
legal basis for many forms of exploitation of protected works.

Other rights are recognized in national laws to ensure that


the basic right of reproduction is respected. Thus, some laws
include a right to authorize distribution of copies of works;
obviously, the right of reproduction would be of little economic
value if the owner of copyright could not authorize the
distribution of the copies made with his consent.

Another right which is being increasingly widely


recognized, including in the TRIPS Agreement, is the right to
authorize rental of copies of certain categories of works, such as
musical works included in phonograms and audiovisual works,
and computer programs. The right of rental is justified because
rental for certain categories of works has become an important
method of commercial exploitation. Furthermore, technological
advances have made it very easy to copy these types of works;
experience in some countries has shown that copies were made
by customers of rental shops, and, therefore, the right to control
rental practices was necessary in order to prevent abuse of the
copyright owners' right of reproduction.

Again the translating or adapting of a work protected by


copyright also requires the authorization of the owner of rights.
Translations and adaptations are also works protected by
copyright. Therefore, in order to reproduce and publish a
translation or adaptation, authorization must be obtained from
both the owner of the copyright in the original work and the
owner of the copyright in the translation or adaptation.

38
Chapter 2IP-Its Main Branches, Role and Importance

Creative works protected by copyright, which


traditionally have been exchanged physically, are being and will
increasingly be delivered in digital form through global
networks. The manner in which intellectual property rights are
administered will be re-engineered to profit optimally from
efficiency gains offered by information technology.

Effective protection of intellectual property rights,


including copyright, patents, trademarks, industrial designs,
geographical indications, etc., is essential since it provides the
necessary incentives for creativity, as otherwise it could be
freely used. Such incentive helps in promoting knowledge-
based growth and socio-economic development.

The intellectual property system must maintain an


equitable balance of interests between public goods and private
interests, and should help promote socio-economic
improvement, the general prosperity of society through the
advancement and worldwide application of beneficial
technology, the promotion of competitive trade and
encouragement of innovators and creators.

Generation of technologies can be helped through


providing various incentives, but most importantly by providing
information to prospective inventors. Again, technologies can
be generated and exported if the inventive habit is encouraged
by ensuring that the system of intellectual property protection is
effective and that the inventor does not have to fear that his
invention is likely to be imitated or used by others without
compensation. Increasing technological improvements and the
introduction of the latest and newest technologies in the
productive sector play a critical role in economic growth and in
promoting competitiveness through the use of the intellectual
property system in responding to consumer demands for
increasingly higher and better quality of production.

39
Socio-Economic Benefits of IP Protection in Developing Countries

A modern intellectual property system could help in


further expanding a country's economic and trade programs,
and help in intensifying activities in business, university and
institutional research for facilitating technological development.
However, lack of information about the usefulness of
intellectual property protection has often led to a mindset
amongst an important section of public opinion largely based on
misinformation.

40
CHAPTER 3

Economic Value Of Effective


Protection Of Intellectual Property

Intellectual property rights are assuming an increasing


role and importance in international trade, in investment, in
economic relations and in economic growth. In the present
global economic scenario of challenges and opportunities for
developing countries, the thrust in every direction of the
productive sector in industrial enterprises, as well as in the so-
called copyright or cultural industry, has to be on invigorating
domestic efficiency and qualitative management in the context
of promoting creativity, creative works and products, in a
growingly open and competitive global economy with greater
opportunities for investments and exports.

As mentioned earlier, intellectual property deals with


creations of the human intellect. Confidence in the intellectual
property system is a powerful stimulus for intellectual
creativity. The protection of intellectual property rights also
enables countries to participate more actively in international
trade. The recognition of the creator and inventor, and the

4t
Socio-Economic Benefits of IP Protection in Developing Countries

protection of their rights and the rights of those who invest in


the making of their creations and/or commercialization of their
inventions, contribute positively to the socio-economic
development of a developing country.

The inscription on the cupola in the entrance hall of the


World Intellectual Property Organization (WIPO) headquarters
in Geneva mentions, "Human genius is the source of all works
of art and invention. These works are the guarantee of a life
worthy of men. It is the duty of the State to ensure with
diligence the protection of the art and inventions." These words
aptly underscore the cultural, social and economic value and
importance of effective protection of intellectual propefiy.

The increasing internationalization of


corporate
production and distribution is fast eroding physical barriers to
international transactions, to tradeability of goods and services
and to the mobility of capital. The growing borderlessness of
trade and technology has thrown up for developing countries,
both new challenges and new opportunities. Technology has
become an important asset in trade. World trade is also
becoming an important factor in the growth process.

Global industrial and trading activity is increasingly


being drawn towards trans-border alliances. Even large
industrial giants are unable to undertake all the technological
requirements in their sphere of competence on their own. Joint
ventures, co-production agreements, joint research, technology
tie-ups and licensing arrangements based on effective
intellectual property rights protection are bringing together
major firms in both the industrialized and the developing
countries. These cooperative alliances include licensing or
authorizing the use of protected inventions, and are an important
aspect of enterprise management of industrial property.

In this changing economic scenario, developing countries


are becoming-in fact some have already become-active

42
Chapter 3 Economic Value of Effective Protection of IP

participants, both as initiators and beneficiaries of change.


While the initiation of liberalized economic reforms in a number
of developing countries has itself subscribed to increased
tradeability, the latter, in turn, is contributing to increasing
opportunities and benefits for such developing countries.
Economic growth is virtually becoming global and not confined
only to industrialized countries.

Those developing countries which have also used their


productive sector to diversify and broad-base their
manufacturing activities largely with the utilization of
the intellectual property system for qualitative production for
exports, have seen their living standards show a steady and
distinctive improvement. The challenges lie in invigorating the
domestic efficiency of innovation management in the context of
a growingly open and competitive economy with greater
opportunities for investments and exports. An increasingly
demanding qualitative management of the productive sector, is
necessary to maintain the confidence of both national and
foreign markets and for continued GDP growth, which, as a
result, will ensure the increasing welfare of the people.

The technological development of industrialized


countries and some of the industrializing developing countries,
if we can call them that, has evolved with the existence and
enforcement of intellectual property rights protection.
Developing countries would need to go ahead with techno-
economic reforms more aggressively. Technology is fast
becoming an important asset in trade, in investment and in
economic development. In this context while trade increases
with investment, it is investment that increases with effective
intellectual property protection.

In the present internationalization of trade, technology


and investment, fears of erosion of economic sovereignty and of
economic space being invaded are sometimes exaggerated.
With increasingly skilled, low cost, technical manpower in a

43
Socio-Economic Benefits of IP Protection in Developing Countries

sizable number of developing countries and with encouragement


of competitive capability, such fear also seems unjustified.
World merchandise trade exports grew by 9Vo in l99Lthe
highest annual increase since 1976. A
continuation and
strengthening of trade expansion was expected to boost the GDP
of developing economies by US$80 billion a year.

There is a growing awareness that intellectual property


rights protection is a crucial part of the new global trading
system. International trade in goods and services protected by
intellectual property rights is increasing, and both developed
and developing countries have recognized that it is in their
interest to provide strong intellectual property rights protection
in order to participate in the benefits of such trade.

There is considerable economic value in promoting the


use of the intellectual property system and ensuring its effective
protection. Intellectual property protection provides a boost to
national wealth, and its contribution to sustainable development
is considerable. Protection of intellectual property rights is not
only conducive to greater international trade, but also to
increased investment in the economies that provide for such
protection. A very much more widespread awareness of its
economic value for the private sector, and of the role of
intellectual property in promoting enterprise development and
competitiveness, as also national socio-economic development
and growth in the 21't century, has to be developed and
encouraged.

The economic value of intellectual property rights


protection lies mainly in increasing competitive capability. An
example to be cited here would be that of the Indian experience
concerning intellectual property protection in relation to the
development of its software industry.

The economies of many developing countries are


growing-some even rapidly. More investment and technology

44
Chapter 3 Economic Value of Effective Protection of IP

transfer in various areas, depending on the counEry concerned,


are needed, as well as the modernization of certain industries,
for instance those in the manufacturing as well as in the services
sectors.

To participate in the many opportunities of the present


century available for developing countries in the international
marketplace, it is necessary to accept the challenge of upgrading
the intellectual property system-both legislative and
infrastructuls-sinss without that no transfer of first grade
technology could be expected.

Strong intellectual property protection with adequate and


modernized legislation and its effective administration and
enforcement undoubtedly helps not only in transfer of
technology but in economic gain, as it assures licensors that
their technology will not be exposed or revealed to competitors.

Good management requires that in enterprises and in


R&D institutions, young technocrats should be encouraged to
invent and innovate, and even if it takes time, to promote
inventiveness in the production of indigenous brands of
technology in which they may have both the competence and
the price edge. In fact, the importance of encouraging
inventiveness particularly amongst the nation's youth cannot be
overstressed. The same holds good for a well administered
collective management of authors' rights. The economic value
of collection and distribution of copyright royalties to creators
of works, encourages talented indigenous authors to write, and
provides the national educational system with textbooks written
by local writers and experts, as also creations by local artists
and technocrats, which are more relatable and less expensive
than importing these from abroad.

The ultimate purpose of the intellectual propety system is


economic in nature. The system encourages individuals and
organizations to invent, innovate and create by offering

45
Socio-Economic Benefits of IP Protection in Developing Countries

incentives, which are commercially attractive, so that the talents


of inventors and innovators could help economic advancement
through technological progress and competitive capability,
which latter will increasingly depend on how well each country
unleashes the creative talents of its people.

As competition in international trade becomes more


intensive, the value of patent information also becomes more
obvious to those who are forced to compete in order to maintain
and improve their position in the marketplace. Again, the
economic value of patent information lies primarily in its ability
to provide industry and enterprises with technological and
market information which can be used to their commercial
advantage.

Industrial property protection is an important instrument


in economic and trade competition. Industrial property and
patent information have an important role to play in helping
shape the directions of research in industries, in business
establishments, in government institutions and in universities.
The inflow as a result of protection of inventions spurs
researchers in institutions and industrial research units, thus
facilitating, in the medium term, the financing of technological
development. Confidence is generated in the system through
effective enforcement of intellectual property laws. Links for
research and innovative activity are established and cemented
between industry, business and the universities, leading
increasingly to a shift in the costs of generating new
technologies from the government to the private sector of the
economy.

For benefiting from the economic value of protection of


intellectual property rights, it is necessary that business and
industry as well as scientific institutions in developing countries
should encourage their scientists and technocrats to overcome
technological obsolescence and increase innovative research
and development. Industry, the corporate sector as well as

46
Chapter 3 Economic Value of Effective Protection of IP

small and medium enterprises (SMEs) have to use the latest and
newest technologies. An advance in technology should result in
a commodity with more attractive performance characteristics
and a product more saleable for the producer and less costly for
the consumer.

Times change, so do standards. And with advances in


technology, what was the state of the art a few years ago loses
its edge today.

Technological progress is an important means of attaining


economic growth and the intellectual property system is an
important resource in helping acceleration of innovation
promotion and technology development as well as a significant
factor in growth.

Broad based economic growth and increased all round


productivity together with better access to education, health care
and social services, reduces long term poverty and hunger.

Meanwhile, for reaping the real economic value of the


intellectual property system, national industry associations
should pay increasing attention to the use of this system in the
growth of the SMEs, which should be encouraged also to follow
improved management practices. While the big industries have
usually a fairly high level of knowledge and expertise
concerning latest inventions in their field of technology, as also
concerning trademarks and industrial designs, it is the SMEs
which need to be increasingly apprised and helped through such
information. SMEs are fairly significant employers and are
units of technological innovation; they often adapt sooner to
technical changes, but are not fully aware of the basic
parameters of intellectual property laws. These micro-
enterprises are the sole sustenance of some 300 million people
worldwide. They should, as a deliberate policy, be assisted by
simplifying regulations and procedures for them, and by
facilitating their access to credits, markets and training. The

47
Socio-Economic Benefits of IP Protection in Developing Countries

opportunities for them to make more informed decisions and


encourage innovative management could also prime the national
technological base.

Economic development and growth is


increasingly
becoming knowledge and technology-based, and is accelerated
through the use of new and constantly emerging technologies.
The global technology system has changed in the last few
decades and knowledge-based technology has advanced
considerably. Intellectual property signifies this advancing
knowledge in the form of new ideas, new techniques, new
processes and new products having economic value and
commercial potential. The Japanese government, for example,
in recent efforts to overcome certain economic difficulties, has
envisaged doubling the nation's intellectual assets by the very
first decade of the 21't century, through promotion of investment
in technological development and in information technology,
with stress on the importance of adequate protection of
intellectual property rights and further innovation promotion.

Innovation is generally expensive. Intellectual property


rights protection provides that the expense is not in vain. The
public also gains as the invention becomes public knowledge
through publication of the patent documents. Technological
progress is an important means of attaining economic growth,
and the patent system, with its wealth of technological
information disclosed through patents documents relating to the
registration of an invention, is an important resource for
technological development, an aid in technology transfer, as
well as a significant factor in economic growth.

Governments need to be made aware of the considerable


economic value of ensuring effective intellectual property
protection and the consequent socio-economic benefits through
enhancement of qualitative competitiveness in
trade and
commerce, and greater possibilities of
technological
advancement in the process of moving from the industrial to the

48
Chapter 3 Economic Value of Effective Protection of IP

information age. Towards this end, knowledge promotion,


education and training, integration of technology and industrial
policy with the necessary infrastructure development, as well as
concurrent promotion of social justice are essential factors to be
considered for effective implementation.

Most importantly, at the national level, there needs to be a


political will to adopt or adapt the intellectual property system,
and to administer it effectively, in order to benefit optimally
from its economic value.

The new worldwide relevance of intellectual property


will be further strengthened with the entry into force, on
January l, 2000, of the TRIPS Agreement for developing
country members of the World Trade Organization. From then,
globally enforceable intellectual property rights have become
available to the single largest number of rights owners having
access to legal protection over their innovations and creativity in
the history of the formal intellectual property system. As a
consequence, new groups with specific needs and uses for
intellectual property, including, inter alia, also holders of
traditional knowledge and of folklore, will be brought face to
face, some for the first time, with existing national systems for
exercise and management of intellectual property rights. The
relevance of intellectual property is thus likely to expand both in
terms of the number of users of the intellectual property system
and the subject matter which they may seek to protect.
Constructive engagement with legitimate, as also newly
articulated needs for protection of human creativity and
innovation, will contribute to ensuring that the formal
intellectual property system continues to function effectively as
a powerful engine of economic growth, and social and cultural
progress in the current millennium.

49
CHAPTER 4

Protection Of Copyright And


Related Rights In The Digital Era:
The Cultural Industry;
Its Contribution To National
Economies: Protection of Folklore
And Traditional Knowledge

As one of the main branches of intellectual property,


copyright provides for protection, inter alia, of literary, musical,
artistic, photographic and audiovisual works.

Since copyright protection covers mass media


communication, printed publications, sound and television
broadcasting, films and, in a number of countries, also computer
programs and computer systems for storage of information, its
economic value and importance in an electronic age is quite
considerable.
Chapter 4 Protection of Cultural Industry and Traditional Knowledge

The rapid advance in technology in relation to intellectual


property rights is an important feature of the contemporary
scenario. Technological development has created new ways in
which products of creative cultural activity can be made
available to the public. Dissemination by new interactive
technological systems is overtaking the traditional means by
which literature, music and films were made available to the
public through retail outlets selling books, video records, etc.
The new interactive online systems enable the people to have
access to databases from which they can cause a book, musical
recording or film to be transmitted to them by wireless means or
cable, and have the option of reading it on the screen, viewing
it, listening to it, or making copies of it.

This online system is no longer national. It is a global


system, in that sitting in one's home in one country, access is
possible to information from other countries. The time honored
methods of providing these products through the sale of
physical copies, is being replaced by the transmission of copies
of works to receiving equipment which enables receivers to
create their own physical copies, instead of going to bookshops,
libraries and music stores. The publishing industry, for
instance, delivers information and entertainment and shares this
ability with the music industry; these industries have become
particularly vulnerable to unauthorized delivery, especially
through downloading via the Internet from illicit websites.

Another important feature of technology is that it is


making it possible to have technological devices, which permit
automatic monitoring of the use to which people put this
enornous wealth of material to which they have access. Thus,
what is often described as a problem created by technology
could be solved by newly emerging technology itself, enabling
an author or copyright owner to keep track of the volume of use
which the public makes of the product of his creativity. Signals
are thus possible to be built into the digitalized version of a
book, music or film, which could record information about the

51
Socio-Economic Benefits of IP Protection in Developing Countries

work made available. These signals could be read by electronic


devices, which have to be embodied in the equipment made
available to the public. This would enable copyright owners to
ascertain the number of copies that have been made of their
works.

But for the protection of copyright owners, it is necessary


to have updated legislation and the required national structures
to enforce protection. It is also necessary that national
legislations make it an offense to circumvent these technically
in-built "copy protection" systems through equally
technologically equipped systems that might deactivate or
bypass the protection systems and thereby allow copying
without compensation. In this way, not only can technology
make it possible for digital texts to be read, but it could also
enable technological systems and legislation being used to
prevent copying without compensation. However, those
building their databases in digital format are also negotiating
with authors direct in order to arrive at acceptable royalties for
use of their works.

Hence, there is an increasing realization that national


copyright legislations need a constant review and updating,
since technology is developing very fast. Qualitative new
problems have been emerging with the advent of digital
technology, of interactive digital networks, digital
"superhighways" and digital delivery systems. The Internet,
originally for researchers, is becoming a worldwide web
connecting millions of users whose number is growing
exponentially.

It has correctly been said that copyright was born out of


technology, with Gutenberg having invented the printing press.
But, during the process of its coming of age, the rapid growth of
emerging, sophisticated high technologies, while posing new
challenges, is also providing new opportunities.

52
Chapter 4 Protection of Cultural Industry and Traditional Knowledge

Technology-based companies ffe, as we see, facing


exciting times, to say the least, that would constantly change the
practices in many industries. In this ever-evolving scenario,
intellectual property rights protection is becoming a priority for
managements, which are willing to confront the realities of
competition.

The advent and rapid evolution of computers and


computer programs have virtually led to the introduction of
digital technology in copyright. During the 1970s and early
1980s, the debate on the way in which these programs should be
protected led to a quasi-unanimous decision, at that time, in
favor of copyright protection.

Digital technology and digital superhighways are


revolutionizing the concept of protection of creative works. An
important issue concerns the consequences of the utilization of
computer technology for the creation, dissemination and use of
works. Another such issue is the change in the terminology that
is used. The expression "computer technology" is progressively
being replaced with "digital technology." The word "digital"
refers to the fact that computers work with digit-based binary
systems. In simple terms, this means that computers use data
and programs, which consist of zeros and ones (known as the
binary code). For a computer, there is no difference between a
program and any type of data. It is all encoded in binary form.
The consequence of this change has been that, with
technological evolution, almost anything can now be stored in
digital form: images, texts, voices, sounds, or music. The key to
the impact of it all is that for the computer these various
elements, once they have been digitized, are all "equal." They
can be merged, transformed, manipulated or mixed to create an
endless variety of new works. Thus, the expression
"multimedia" works as referred to, is used to describe
composite works in which various types or categories of works,
for example images, sounds, and texts are judiciously mixed
together.

53
Socio-Economic Benefits of IP Protection in Developing Countries

All types of information can be stored in a single carrier,


for example, a hard disc or a Compact Disk-Read Only Memory
(CD-ROM). If a multimedia CD-ROM, for example, deals with
geography, it will enable the user not only to read the text on the
subject and view photographic pictures as in a textbook, but it
could also supply statistical material in figures or graphic
representations, maps of various kinds (topographic, political or
statistical) through which the user may get as many details as
the encoded material allows, and also illustrations in the form of
sound (such as a recording of the national anthem) and moving
images (films showing landscapes and significant events). This
has a number of important consequences for copyright.

The speedy creation through the use of digital technology


of digital versions of works originally produced in the analogue
domain, for example, sound recordings, motion pictures, and the
capacity to produce an enornous number of low-cost,
distortion-free copies, raise questions regarding the recognition
of new rights relating to the creation of digital copies of existing
works, concerning the need for legal structures, as well as rights
associated with broadcasting, where the recipient of the
broadcast signal will have the ability to make any number of
copies of the material broadcast, and concerning the cooperation
between rights holders and manufacturers and distributors
of equipment that will have the capacity to create, reproduce
and manipulate digital information.

The digital format not only affects creation, but also


communication and diffusion of works. Works and material
stored on a digital medium can be communicated and then
received in their original quality. Such communication
networks are often referred to as the national (or global)
information infrastructure or the "information superhighway. "

The information superhighway has yet another crucial


aspect in that it will allow interactive communication with the

54
Chapter 4 Protection of Cultural Industry and Traditional Knowledge

listener s1 visrwsl-\Mho, in reality, will become the interactive


user. This digital distribution of works upon request, for
instance, is raising problems on quite a different scale. Using
these systems which are being constantly improved, a user can
ask for and receive at his home, a film, a musical work, or a text
and possibly even a computer program or any other type of
work that can be digitized, by contacting a huge digital database
linked to a cable or telephone system, or any work transferred to
a binary computer format enabling a computer to process the
work in the same way as simple data in digital quality. That
data can then be manipulated and reproduced a large number of
times, without any loss of quality.

The impact of this kind of distribution of works on


copyright is and will continue to be significant. In the context
of the protection of copyright and related rights in the digital
age, it has led to the adoption, in 1996, of two international
treaties, the WIPO Copyright Treaty (WCT) and the WIPO
Performances and Phonograms Treaty (WPPT). These treaties
clarify that exclusive rights must apply to such "transmission on
demand" and they also oblige the contracting Parties to provide
legal remedies against the circumvention of technological
measures (e.g., encryption) used by authors in connection with
the exercise of their rights, and against the removal or altering
of information, such as certain data that identify the work of
their authors, necessary for the management (e.g., licensing,
collecting and distribution of royalties) of their rights ("rights
management information").

In the 2lst century, newer and more sophisticated


will continue to emerge that will affect the exercise
technologies
of copyright. In addition to digital technology, evolution of
technologies in respect also of private copying or home taping,
reprographic reproduction, video and record rentals, computer
programs, databases, and satellite broadcasting need to be
closely followed for their possible impact also on the exercise of
copyright. The Intemet, fiber optics and the merging of the

55
Socio-Economic Benefits of IP Protection in Developing Countries

telephone, the computer and the TV are making instantaneous


communication in the global village an everyday routine.

At this point it is germane to consider the development of


the copyright or cultural industry, its contribution to national
economies, with some random samples from a few developing
countries and figures concerning certain industrialized countries

Encouragement of creativity in literary and artistic works,


by its effective protection through modernized national
copyright legislation and the determined enforcement of such
legislation in the face of the emerging technologies, is an
important contributory factor in socio-economic and cultural
development of a country as it encourages, attracts and sustains
investments in what has come to be known as the cultural
industry. Institutions and enterprises that undertake the
production and distribution of
educational, scientific and
cultural material as well as that covering information
technology, sophisticated high technologies, computer software
and the entertainment fields are all part of the cultural industry
of a country.

The cultural and information industry, which depends for


its sustenance on an updated, modern, effective and well-
enforced copyright legislation, has also come to be known as the
copyright industry. It is growing rapidly in developed countries
as well as in a number of developing countries. The core of this
industry is book publishing, newspapers, periodicals, printing;
advertising, radio and television broadcasting; sound
recordings, music and audiovisual works, motion pictures and
films; and computer software. Each of these sectors deals with
the generation of material protected by copyright, and with the
dissemination of that material. In addition there are related non-
core industries and institutions whose activities are in some
measure copyright-dependent. These include those industries
that deal with the production of equipment or hardware needed

56
Chapter 4 Protection of Cultural Industry and Traditional Knowledge

for the use of copyrighted material (radios, television sets,


computers, recording and listening devices), as well as the
output of printers, binders, paper and printing machine
manufacturers, which contribute to the output of the copyright
industries; and, of course, such institutions as libraries, theaters,
and so on.

The so-called copyright industry represents, in some


countries, the fastest growing sector of the economy, creating
considerable employment generation and having an increasing
export performance and potential. The contribution of this
industry to the gross national product (GI.[P) is also bound to
increase in the years to come, in a number of rapidly growing
developing countries, which are taking up both the new
challenges and the new opportunities thrown up by the
increasing borderless dimension of trade and economy. The
internationalization of socio-economic activities and the fillip it
has provided to the information technology industry has made
some developing countries active participants both as agents
and beneficiaries of the change.

The economic importance of


copyright and of the
copyright industry in those countries which are major creators
of copyright material has been well established. All the studies
carried out so far indicate that it contributes considerably to
national wealth.

While it is difficult to be precise about which of the


economic activities comprise the copyright industry and their
exact contribution to the national output, all studies indicate that
the industry ranks in size with other major conventionally
defined industries in those countries.

"The copyright system as it now exists in virtually every


civilized country is a vital part of modern society's
infrastructure, serving the entire community...It is the
foundation on which the world's publishing industry rests,

57
Socio-Economic Benefits of IP Protection in Developing Countries

bringing the written or recorded word, carrying knowledge,


ideas, understanding and entertainment to every literate
person...in the community...The orderly acquisition and
transfer of rights which take place within the copyright system
are indispensable to the entire media-newspapers, journals,
radio and television, otrd, of course, the whole world of
entertainment-theatres, concerts, films, record production,
broadcasting. All depend upon a regular supply of literary,
dramatic, musical and artistic works, the creation and
dissemination of which is stimulated and regulated by the
copyright system...With the extension of the system to the
protection of computer software, much of the industrial and
commercial activity of a country involves the use of rights
protected by copyright.

Until recently no one had any real idea of what the


economic dimensions of the copyright industries were; but in
the last two decades, in several countries, independent surveys
have been carried out which have produced some quite
remarkable statistics." s

To give examples of some countries where such studies


have been conducted over the last decade or so, the contribution
of the copyright industries to their GNP was (taking them in the
alphabetical order):Australia 3.l%a; Germany 2.9Vo;
Netherlands 4.5Vo (according to
the 1993 study by the
Foundation of
Economic Research of
the University of
Amsterdam, commissioned by the Dutch Copyright Federation);
New Zealand 3.27o; Sweden was stated to be as high as 6.6Vo

5
Reproduced ftom the Introduction in the booklet entitled The Fight Against
Piracy, by Denis de Freitas, Solicitor General of the former West
Indies; former Senior Adviser to the Performing Rights Society of the
U.K., and to the lnternational Federation of the Phonographic Industry
(IFPI); President of Honor of the British Copyright Society.
Publication by the lntemational Publishers' Copyright Council
(IPCC).

58
Chapter 4 Protection of Cultural Industry and Traditional Knowledge

although Jennifer Skilbeck rn The Economic Importance of


Copyright (International Publishers Association, 1988) places
this at 3.16Vo 6; the United Kingdom 3.6Vo (according to a 1993
update of the study on the United Kingdom, based on figures of
1990); the United States of America 4.3Vo of the GDP or
US$348.4 billion in value-added in 1997, including the
dependent or subsidiary industry.

For developing countries an important economic indicator


of the contribution of the copyright industry is that it is a
substantial employment provider as it has been in a number of
developed countries. For example, it provided employment in
Australia for over 200,000 persons or over 3Vo of the labor
force; in
New Znaland, employment in
copyright-based
activities grew by just over 8Vo in the five yerlrs from 1986 to
l99l; in Germany, such activities provided employment for
about 800,000 people or over 3.67o of the total job market; in
the United Kingdom for
over 800,000 persons; and
employment in the core copyright industry in the United States
of America more than doubled between 1977 and 1997 to 3.8
million workers (2.9Vo of the total U.S. employment) and grew
at nearly three times as fast as the annual rate of the economy as
a whole (4.8Vo vs.1.6Vo).

It
may also be interesting to note that the share of the
copyright industry in the GNP of the United Kingdom exceeded
the share of the GNP of the motor car and food manufacturing
industries. In the United States, the core copyright industries
grew at over twice the annual rate of growth of the remainder of
the economy between 1977 and 1997,7 and were one of the

6
Quoted by H,C. Jehoram, Professor of Law, University of Amsterdam, in his
article in International Properry and Copyright Law No. 4, 1989.
'Cf. a paper on "Enforcement of Copyright andRelited Rights" by Eric H.
Smith, President, International Intellectual Property Alliance (IIPA),
Washington, presented at the Congress of the lntemational Literary
and Artistic Association (ALAI) in Berlin, on June 18, 1999. Cf.also

[Footnote continued on next page]

59
Socio-Economic Benefits of IP Protection in Developing Countries

largest and fastest $owing sectors of the economy. The export


income generated by intellectual property in general has also
increased substantially in some countries, the biggest exports
being mass products of
popular culture-movies, music,
television programs, books and computer software. For
instance, the U.S. copyright industries achieved foreign sales
and exports of US$66.85 billion in 1997, more than all major
industry sectors including agriculture, automobiles and the
aircraft industry.8

The significant employment potential of the copyright


industry is an important factor to be considered by many
developing countries, since quite a number of such countries in
different regions of the world have a very sizable cultural
industry, in terms of its contribution to the GNP.

[Footnote continued from previous page]


the latest economic report of the IIPA as per their press release dated
December 16,1999, "New Study Reveals Copyright Industries are
Engine Driving U.S. Economy: Copyright Industries Lead the
Economy in Contribution to GDP, Jobs and Foreign Sales."
The IIPA is a coalition formed in 1984 consisting of seven trade
associations, each of which represents an important segment of the
U.S. copyright industry. These are AFMA (formerly the American
Film Marketing Association); the Association of American Publishers
(AAP); the Business Software Alliance (BSA); the Interactive Digital
Software Association (IDSA); the Motion Picture Association of
America (MPAA); the National Music Publishers' Association
(NMPA); and the Recording Industry Association of America
(RIAA).
Also see release dated February 16, L995, of the Intemational
Intellectual Property Alliance, Washington, entitled "Copyright
Industries Continue as One of the Largest and Fastest Growing Sectors
of the U.S. Economy; Employment in These Industries Grew at Some
Four Times the Rate of the Overall U.S. Economy Between 1988-
1993." The author is grateful to Eric H. Smith, Executive Director and
General Counsel, for sending him this release and an updated study
entitled "Copyright Industries in the U.S. Economy 1977-1993," as
well as IIPA's latest Press Release dated December 16, 1999.
8 lbid.,

60
Chapter 4 Protection of Cultural Industry and Traditional Knowledge

Amongst developing countries, according to a first such


study undertaken at the instance of UNESCO, in respect of
certain developing countries of the Asian region, in 1996, and
published in 1997,e it showed that in India, the world's largest
democracy, which has also one of the world's largest
economies, the contribution of the cultural industry to the GNP
was 5.O6Vo. The private sector which has throughout had an
important role, is present in most sectors of the economy, and
generates around two-thirds of the country's GDP.

It has a sophisticated book publishing industry, which


ranks amongst the top 10 in the world. The annual book title
production was around 57,400 in 1997. The turnover was over
US$455 million. Its film industry is the biggest in the world,
producing nearly 800 films a year, including documentaries
having a turnover of 1.2 billion; [n music it has a market of
great potential for the record industry. It is a very major
producer with the largest unit sales among developing countries
in the Asian region. The total unit sales amounted to nearly
412 million in 1997 . In value terms, it is a close second in Asia
after the Republic of Korea, the retail value of its music sales in
1997 being nearly US$334 million.

Likewise, in computer software which is protected as a


literary work under its copyright law since 1984, the industry
has grown to be one of the foremost in the world with a
compounded growth of more that 50Vo between 1990 and 7997,
and is increasingly becoming the driving force in information
technology. Exports of software have increased from
US$225 million in1992-93 to US$1750 million in 1997-98, and

e Cf . Role of Copyright in Cultural and Economic Development of Developing


Countries: The Asian Experience, by Shahid Alikhan, former
Deputy Director General, WIPO, published by UNESCO (December
1996) and a further updated text published by the Rajiv Gandhi
Institute for Contemporary Studies, New Delhi (October 1997).

61
Socio-Economic Benefits of IP Protection in Developing Countries

to US$2650 million in 1998-99. According to the estimates of


the National Association of Software and Service Companies
(NASSCOM) in India, this was expected to rise exponentially to
around US$4 billion by 1999-2000 with the total projected
earnings of the software industry in that year being
US$5.7 billion, including domestic software, sales of
US$1.8 billion. The software exports are estimated to be over
US$6 billion by 2OOO-2001, and to increase to US$9 billion by
2001-2002, to US$25 billion by 2OO4-2O05 and to
US$50 billion by 2007-2008. By then, the country's software
industry is expected to earn an annual revenue of US$85 billion
comprising of US$50 billion in software exports and almost
US$35 billion in domestic software sales. In 1998-99, 6l%o of
the total Indian software exports were to the United States and
North America, and 23Vo to Europe, with increasing market
opportunities in Canada, France, Japan, the Middle East and
South Africa. tn the next years, software exports to many
countries in Latin America, West Asia and Australia are also
expected to increase. The competitive advantage of the
software industry is based on its cost effectiveness, world class
quality, high reliability and rapid delivery, all of it powered by
state-of-the-art technologies. The Indian software industry has
also been one of the catalysts for promoting multimedia and
related services.

The domestic software market, supported by rigorous


enforcement of copyright laws and increased government
spending on information technology, has grown from
US$490 million in 7995-96, to US$1.25 billion in 1998-99. As
of March 31, 1999, the software industry employed more than
250,000 professionals of whom around 80,000 were in software
exports.

For achieving this velocity of business, both the software


industry and the govemment have taken some purposeful steps.
In May 1998 the Government of India not only put software on
its National Agenda, but also created a National Task Force,

62
Chapter 4 Protection of Cultural Industry and Traditional Knowledge

which latter has adopted some pathbreaking measures.


Government's support include fiscal benefits, availability of
high speed data communications and infrastructure, besides
ensuring of an almost red tape free system. The fiscal benefits
include trade free zones, Technology Park schemes and tax
exemptions on profits from software exports.

Insofar as information technology (IT) is concerned, the


projection is for the country to be one of the IT superpowers by
2008. Also, by that year it is expected that 2.5 million jobs will
be created in the IT sector. Apart from two Institutes of
Information Technology in a central and an northern state, a
major Indian Institute of Information Technology (IIIT) has
been set up in Hyderabad in the southern state of Andhra
Pradesh. This IIIT, set up by global players in the IT industry in
association with the state government, is designed to be an
industry-driven centre of excellence in IT education and training
at undergraduate and postgraduate levels. Around this core
IIIT, major IT companies, such as IBM, Microsoft, Metamore,
Oracle, and Sathyam computers are setting up corporate schools
offering also short-term training programs in their areas of
specialization. It is a research-driven institution, the conceptual
model being different from the others, in that the vitality to
sustain it would be by industry. The ultimate tribute to the skill-
base of the industry has already been paid by the first Microsoft
Chairman Bill Gates who picked the Indian city of Hyderabad
for basing his company's first-ever development centre outside
the United States of America. In the coming years, software
companies in India are expected to strike quite a few deals for
joint ventures and strategic alliances with foreign companies.

As for e-cofilmerce, an interesting survey revealed that


out of the top 28 e-commerce companies in India, 18 were
growing annually at more than 5007o. Likewise Internet which
has just about 1.4 million users today in India, is expected to
explode to 37 million by 2003 and will position the country as a
global hub for content development and e-commerce.

63
Socio-Economic Benefits of IP Protection in Developing Countries

Other examples of some developing countries in Asia


taken from the earlier mentioned study, were that of China,
whose GNP and economy grew at a near record pace (with a
growth rate between 10.5 to lZ%o per year between 1992 and
1994), and whose trade escalated from around US$30 billion in
1980 to over US$l35 billion in 1992. Its economy is expected
to increase eight times by 2002 over what it was in 1978, when
the reforms began.

Since 1978, the Chinese Government has, in order to


speed up the development of the national economy, science and
technology, and cultural undertakings, put intellectual property
rights (IPRs) as one of the priorities on its reforms agenda.
Enterprises and research institutes have been encouraged by
government, to improve upon their internal systems for
intellectual property management, and to fortify self-protective
measures. They were urged not only to respect others IPRs but
also to protect and utilize their own IPRs.

China's huge cultural industry has benefitted by this


agenda. ln 1994, the book publishing industry published, for
example, 104,000 titles, of which 61,000 were new titles. The
number of printed copies of these titles were over 3.0 billion;
nearly 150 films were produced with attendance in cinemas
stated to be nearly 14.5 billion people (according to 1997
figures); sales of prerecorded music was nearly US$280 million
n 1997; the unit sales in the same year being 165 million.
It is estimated that by the year 2003, China will become
one of the world's largest Internet markets; it has already
registered the fastest growth of the Net market with millions of
online users. The number of Internet users in China increased
more than fourfold from 2.1 million in December 1998 to
8.9 million in December 1999 according to a report released in
January 2000 by the China National Network Information
Center (CNNIC). During the year 2000, more than 500
websites are expected to turn to e-commerce activities, bringing

64
Chapter 4 Protection of Cultural Industry and Traditional Knowledge

the total of such websites to over 1000 by the end of the year.
The country's e-commerce turnover is expected by 2002 to
reach US$1.2 billion (as per a source from the Ministry of
Information Industry quoted by The China Daily,
January 23,2OOO). As reported in the same newspaper, a recent
survey of 14 major cities conducted jointly by the Beijing based
China Mainland Marketing Research Company and certain
other research institutions across the country, indicated that by
the end of 1999, as many as 2l7o of urban families had
computers, a sharp rise from less than 37o in 1995.

Again, China's software industry, which has made a


substantial contribution to the country's economic development,
is expected to be a powerful engine of economic growth in the
present millennium. The software industry in China had,
according to a recent study 10, created more than 60,000 jobs and
generated nearly US$220 million in tax payments in 1997. The
average annual growth rate of the software industry was
expected in the five years 2fr)0 to 2005 to be 28Vo; the total
market size was estimated to reach US$3.6 billion by 2001 and
provide very nearly 104,fi)0 jobs by then.

In Indonesia, an archipelago with around 13,000 islands


and the world's fourth most populous nation, with structural and
trade reforrns encouraging foreign investment, with a now
diversified manufacturing economy, and encouragement of
efficient export industries, economic growth has been sustained
at an average of 6.5 to 77o between 1985 and 1994. The book
publishing industry produced around 5000 new titles in 1997.
As for unit sales of prerecorded music, it was 79 million in

r0
Cf. Study commissioned by the Business Software Alliance (BSA) and
conducted by Price Waterhouse Coopers, along with the Research
Centre of Computer and Microelectronics Industrial Development
(CCID). The said study is based on surveys conducred in Beijing,
Guangzhou, Shanghai and Shenzhen from July to September 1998, as
reported on in the China Daily, December 22,1998.

65
Socio-Economic Benefits of IP Protection in Developing Countries

1996, with a retail value of US$225 million. The number of


films produced was around 30. The copyright law amendment
of 1987 extended protection to sound and video recordings and
to computer programs. Its administration is under the
Directorate General of Copyrights, Patents and Trademarks
under the Ministry of Justice. In 1996, the packaged software
industry accounted for US$143 million in sales; it provided for
nearly 2600 jobs and generated US$26 million in direct and
indirect tax payments to government.ll

In Malaysia, with a GDP growth averaging almost 7Vo


per year between 1965 and 1993, with increasing export
orientation extending beyond tin and rubber to palm oil, gas,
petroleum and manufactured products and the development of
an efficient and competitive private sector assisted by an
educated labor force, the country can look forward to its aim of
becoming an industrial economy in the first decades of the 21't
century. With manufacturing growth at l27o per year over
almost two decades, the "Vision 20-20" target seems well set to
be achieved. During their Seventh Plan (1996-2000), the
Government of Malaysia, particularly conscious of the critical
role of information in decision making and in global
competition, has put information technology in the forefront of
economic development for improved efficiency, productivity
and competitiveness. A National Action Plan is proposed for
coordinating, planning and managing of information technology
development. This includes the construction of a multimedia
corridor in the capital, to provide world class information
infrastructures, for encouraging private sector multimedia
institutions to set up their business institutions.

" Cf. for packaged software figures in respect of Southeast Asian countries, a
study conducted by Price Waterhouse, commissioned by the Business
Software Alliance (BSA) entitled "Contribution of the Packaged
Software Industry to the Southeast Asian Economies," May 1998.

66
Chapter 4 Frotection of Cultural Industry and Traditional Knowledge

Malaysia's copyright law revised in 1987, ffid again in


1990, with a view to bringing it largely in harmony with
international standards, provides also for protection of computer
programs, and is administered by a Director in the Intellectual
Property Division of the Ministry of Domestic Trade and
Consumer Affairs, with an Enforcement Division in the same
Ministry. The book publishing industry produced nearly 3800
new titles in 1996, with around 14 million copies. The
prerecorded music sales were 17 million in 1996, with the retail
value being around US$100 million. The book publishing,
newspaper, advertising and music industries themselves add up
to a turnover of
around US$600 million-a reasonable
percentage themselves of the GNP. There is also a small film
industry and software and other cultural industries. Packaged
software sales amounted to US$298 million in 1996 with jobs
generated being nearly 3700 and tax contributions being
US$78.5 million.

In the Philippines, despite structural reform, GDP growth


which fell to below l7o on an average per year between 1990
and 1992, picked up to l.l%o in 1993. Future sustainable
growth in the 21't century will also need strengthening of
infrastructural services. The Government's Medium-Term
Development Plan, 1993-98, aimed at restoring growth and
macroeconomic stability, bolstering investor confidence with
expansion of infrastructure base. The Presidential Decree of
1972, amended in 1985 provides for copyright protection. The
book publishing industry produced, in 1997, nearly 5100 new
titles, while the music unit sales were nearly 12 million with a
retail value of US$57 million. The final sales in respect of the
software industry amounted to US$106 million in 1996,
providing nearly 1700 jobs and contributing about
US$26 million in taxes to government.

In the Republic of Korea, one of the very successful


economies in the developing world in the post Second World
War period, the export growth has been nearly 2OVo annually

67
Socio-Economic Benefits of IP Protection in Developing Countries

with a wide range of sophisticated products. The country has


become the world's 11th largest trading nation. It has a sizable
book publishing industry which, in respect of the titles
published, increased by 4l%o between 1982 and 1992. The
number of new titles published in 1997 was 27,313; the total
copies printed were nearly 189 million the same year. The total
turnover in book sale increased more than five times during
1982-1992, and in 1993, further rose to a little over
US$2.7 billion, which alone then accounted for l%o of the GNP;
the film industry produced nearly 65 films in 1993; the sales of
their prerecorded music industry in 1996 was over
US$500 million, the second highest of any developing country
in value terms after BrazTl, the third being India. The Republic
of Korea was also in 1995, the tenth largest country in the world
in respect of pharmaceutical production.

In Singapore, with continuing political stability and a


well-established infrastructure and considerable foreign
investments, and with one of the world's strong economies,
there is an active book publishing industryi over 100 publishing
companies are members of the National Book Publishing
Association; more than 10,000 copies are published of each
title, going up to 20,000 copies of each bestseller; its copyright
law is very sternly enforced, with piracy levels reduced sizably.
Book exports were of the order of
US$250 million in 1993, while recorded music sales were
nearly US$80 million in 1996. Software industry sales
amounted to US$418 million in 1996, providing over 4000 jobs
and about US$95 million in tax payments to government. On
the basis of the government published economic data, taking the
GNP figure for 1993, since most of the gross turnover amounts
of the cultural industries available pertaining to that year, and
taking the output of selected industries, such as book publishing,
software development services, advertising, motion pictures,
video distribution, radio and television broadcasting, the

68
Chapter 4 Protection of Cultural Industry and Traditional Knowledge

percentage of the GNP constituted by these cultural industries in


Singapore was 2.7Vo.12

In Thailand, the economic performance since the mid-


1980s has been on a growth path. With macroeconomic policies
strengthened by a supportive private sector, the GDP growth
between 1987 and 1990 was then amongst the highest in the
world, averaging nearly l2%o. The growth continued, with an
export oriented economy, at around 8Vo a year between 1991
and 1993. The authorities aim was to continue competitiveness
through production and export of more sophisticated products
by improving infrastructure and upgrading labor skills. In
respect of the publishing industry, the annual book title
production in 1997 was 8000, with total revenues from book
sales being US$100 million in the same year. The software
industry accounted for US$264 million in final sales, providing
nearly 2600 jobs and contributing about US$55 million in raxes.
Recorded music sales amounted to nearly 16 million units in
7997, with rental value being US$171 million. Authorities rely
for copyright enforcement not only on the Copyright Act of
1970 as amended in 1994, but also on other legislative backup
in respect of laws concerning Control of Audio/Video Tapes of
1979, the Consumer Protection Act of 1979 and the Revenue
Code. The increased activity and vigilance of the Thai
authorities in combating of copyright piracy in the context of
software, of videos and of CD's, is yielding satisfactory results,
with the Thai IPR court becoming much more severe on
offenders. The Association of Thai Software Industries and the
Association of Thai Computer Industries, have also been
working in coordination with the Business Software Alliance
(BSA) to ensure respect for intellectual property rights.

In Viet Nam, the rehabilitation program which began in


1986, accelerated in 1989 and the macroeconomic perforrnance

12
Op.cit., footnote 9,page6l.

69
Socio-Economic Benefits of IP Protection in Developing Countries

improved considerably by 1993 when the GDP growth reached


8Vo. With the liberalization of private sector activities and
efforts to make foreign direct investment attractive, the aim was
to continue at the same GDP growth level. With a new
copyright law that entered into force in 1996, hopefully the
development of the cultural industry will gather momentum.

The cultural industry protected by copyright is also a


substantial contributor to the national economies in other
developing regions of the world.

In Africa, the cultural industry, especially in respect of


book publishing and music, is on a progressive path. ln South
Africa, the region's largest economy with growth potential
much higher than current projections of 3 to 4Vo a year,
especially with increased trade and investment flows, the
copyright industry has registered a sizable increase during the
1990s. Annual book title production rose in 1996 to 9000 new
titles, the number of copies published being 43.5 million.r3 Book
sales in 1997 amounted to 1500 million SAR (South African
rands, approximately US$250 million). The retail value of
music sales in 1997 amounted to US$222.2 million and unit
sales (including LPs, MCs, CDs) were 21 million. In Nigeria,
the second largest economy in the region and the largest country
in Africa, petroleum production provides almost 25Vo of the
GDP, over gOVo of foreign exchange receipts and 7O7o of
budgetary revenues.la It has a very sizable book publishing
industry. It has a large music industry, the unit sales of which in
1996 were 8 million and the retail value of recorded music sales
in the same year amounted to US$9.7 million. In respect of
some other African countries, to quote a few examples, the

13
Cf. Annu.al Statistics, published by the International Publishers Association
(IPA), last updated August 9,1999.
ta
Cf.Trends in Developing Economies,1994, published by the World Bank.
GDP projections and some country economic figures in this Chapter
are based on information therein.

70
Chapter 4 Protection of Cultural Industry and Traditional Knowledge

retail value of recorded music sales was in Ghana


US$16.3 million, in Zimbabwe US$9.1 million, in COte d'lvoire
US$6.8 million, and in Kenya US$2.1 million.

Again, in Africa, high commodity prices also boosted


growth in East African nations, e.g. Kenya, Uganda and the
United Republic of Tanzania. These countries are in a position
to progress significantly in trade policy reform and
macroeconomic policy issues. They are, along with C6te
d'Ivoire, Ghana, Nigeria, South Africa, Zambia and Zimbabwe,
among the 36 or so African countries members of the WTO and
party to the TRIPS Agreement, and committed to trade
liberalization, as also to intellectual property legislative reform.
Some countries are considering or undertaking free trade
agreements with industrialized countries. All this is bound to
also help progress of their cultural industry in the coming
millennium.

As far as the book publishing industry is concerned, the


Ghana Book Publishers Association (GBPA) is a strong
publishers association formed nearly two and a half decades
ago. It along with the book publishing industries in Kenya,
Nigeria, South Africa, Uganda, the United Republic of Tanzania
and Zimbabwe are also members of the International Publishers
Association (IPA).

In the Arab States, with their centuries of culture, the


book publishing and music industry, in particular, are well
established. In respect of the latter, the names of singers
Um Kulsum and Fairouz have long been household words.
More recently, the software industry has progressed rapidly in
some countries. Economy in a number of these countries is
projected to return to sustained growth over the medium term.
The economic and trade liberalization, as also the reforms
programs have the potential of sustaining levels of GDP growth,
and the necessary macroeconomic stability as well as reduction
in unemployment, amongst both the fuel exporters and the more

7t
Socio-Economic Benefits of IP Protection in Developing Countries

diversified economies including Egypt, Jordan, Morocco and


Tunisia. About 10 Arab States members of the WTO and party
to the TRIPS Agreement are committed to modernizing their
intellectual property legislation or have already taken steps to do
so.

To mention only a few examples, Egypt which with the


largest population and one of the largest economies in the Arab
Middle East, has with its reform and liberalization program
initiated in July 7993, focused on macroeconomic stabilization
designed to improve the growth performance in the medium
term. It has, among others, also stepped up its efforts for human
resource development. This will enable the already excellent
education system to provide students with market relevant
skills. The Copyright Administration under the Supreme
Council for Culture in the Ministry of Culture has taken
substantial steps in promoting creative activity and protection of
intellectual property rights. The music industry has developed
in the 1990s with prerecorded music sales having gone up in
terms of units, from l1 million in 1992 to 2O.l million in 1997,
and in retail value of these sales, from US$13.3 million in 1992
to US$42.8 million in 1997. It has also a growing software
market, with local sales in 1999 estimated at US$50 million and
a growth rate of 35Vo.

In Algeria, where prospects in the medium term indicate a


return to economic growth from almost a negative position in
1993, the National Office of Copyright (ONDA) under the
Ministry of Culture and Tourism has been an effective
stimulator of copyright protection and consequently of the
copyright industry. Algeria has one of the very well organized
societies of author's rights in the Arab region.

In Jordan, with a rise in GDP growth, with farsighted


management of external debts to restore access to world
markets, it is expected that sustained economic growth would
also provide a fillip to the cultural industry including software.

72
Chapter 4 Protection of Cultural Industry and Traditional Knowledge

There is a remarkable realization at the highest governmental


levels that increasing the use of the intellectual property system
could greatly assist in accelerating socio-economic
development. Jordan's software and information technology
services industry, in particular, reacting to global trends, is
providing the necessary infrastructure with focus on quality,
investing in human resource development, infrastructure
building for increased competitiveness, and encouraging
collaboration between firms. The target by the year 2ff)4 is to
provide 30,000 new jobs, with exports of US$550 million a year
and to open up to US$150 million of foreign investment in this
sector. The software and IT industry has the Government's
support also for its export promotion. It is pressing for stronger
and increasing effective intellectual property enforcement,
greater regulatory framework and increased university - industry
ties, in its aim of becoming a regional leader in this field.

In Morocco, with recent economic performance being a


combination, among others, of sustained growth, with
its abundant natural resources including the world's most
accessible phosphate reserves and overall economic
stabilization, the manufacturing sector has increased its share of
merchandise exports. The National Copyright Administration
(BMDA) under the Ministry of Information has been promoting
copyright protection activities and the industry it protects. In
1997, the annual book title production in 1997 was of 1859 new
titles, with the number of copies published being 21 million.

In Sudan, which is party to a large number of


international conventions and treaties in the field of intellectual
property, the National Copyright Administration in the Ministry
of Culture under the charge of the Registrar General, Office for
the Protection of Intellectual Property (Copyright), has been
promoting the progress of copyright protection and that of the
cultural industry. Sudan is also, along with Egypt and Morocco,
among Arab States, member of the International Publishers
Association (IPA).

73
Socio-Economic Benefits of IP Protection in Developing Countries

According to figures published by International


Federation of the Phonographic Industry (FPD in 1998, the
retail value of prerecorded sales in 1997 was high too in certain
other Arab States, being US$99.9 million in Saudi Arabia,
US$34.5 million in the United Arab Emirates, and
US$10.5 million each in Kuwait and Lebanon. There has also
been a rapid expansion of the software market in Saudi Arabia,
the local sales of which, in 1999, were estimated at
US$420 million - the growth being lOTo in that year.

Insofar as Latin America and the Caribbean is concerned,


in respect of the cultural industry, Latin America particularly
has been, in the last few years of the 20ft century, among the
fast growing regions in the developing world, with rising
turnover in the publishing sector, along with increasing
generation of jobs and employment in that sector; while in the
music sector, sales in 1998 had doubled since 1991, with CD
sales rising from 21 million units in 1991 to a little over 200
million in 1998, representing an average annual growth of 387o.
In the music sector, domestic and regional repertoire dominates
sales. In fact the influence of its music has been increasing
worldwide, with artists such as Ricky Martin, Luis Miguel and
Enrique Iglesias breaking into the United States of America and
European markets, and of course, among Caribbean singers,
Bob Marley.

The turnover in the software industry in Latin America


had also increased in 1998, and while exports have risen so have
imports in this particular sector. According to a recent study
released by the Business Software Alliance (BSA) in September
1999, outlining the contribution of the software industry to the
regional economy, it showed that in 1998 this industry had
generated US$3.5 billion in sales and provided for 137,345 jobs
throughout Latin America. Based on an average growth
projection of 78Vo per year by the year 2OO2, the packaged
software industry in Latin America was expected to produce

74
Chapter 4 Protection of Cultural Industry and Traditional Knowledge

nearly 194,000 jobs. It also indicated that there has been a


steady increaseof the use of information technology in Latin
American and Caribbean countries and that information
technology was becoming a key business element in all sectors
and in almost all countries in the region. Incidentally, a number
of countries again in Latin America and the Caribbean have
ratified and acceded to the new Internet treaties. For instance
Argentina, El Salvador, Panama and St. Lucia have ratified both
the WIPO Copyright Treaty (WCT) and the WIPO
Performances and Phonograms Treaty (WPTT), while Mexico
has ratified the WPTT.

In Argentina, which at one time was rated as one of the


world's most prosperous countries until around 1975, the
government has since the early 1990s, instituted structural
reforms, including privatization, to divest a number of public
sector enterprises in order to reduce the budgetary burden on the
exchequer. GDP rose to 6Vo tn 1993 and since then investments
having recovered due to macroeconomic stability, capital
inflows had increased. The medium-term prospects were for 5
to 6Vo growth annually. In regard to the cultural industry,
prerecorded music sales in units rose from 10.8 million in 1991
to 27 .4 million in 1997; the retail value of these sales increased
from US$119 million in 1991 to US$385.7 million n t997.
The book publishing industry recorded an increase in number of
titles produced, from 9913 in 1996 to 11,919 in 1997; the
number of copies of books published increased from 42 million
in 1996 to 56 million in 7997; the turnover in the book
publishing sector was US$520,311 in 1997, up from
US$490,012 in 1996. The sales of packaged software in 1998
amounted to US$465 million, with jobs generated being nearly
16,800, and US$167 million in fiscal contributions.ls

ls
Cf. for software figures, a study conducted by Price Waterhouse Coopers,
commissioned by the Business Software Alliance entitled
"Contibution of the Software Industry to the Latin American
Economies."

75
Socio-Bconomic Benefits of IP Protection in Developing Countries

In Brazil, which had earned the reputation of a near


miracle economy in the late 1960s with double-digit growth, the
structure of the economy has changed progressively. The
growth rate in Brazil, was one of highest in the world, averaging
97o between 1965 and 1980, but dropped sharply between 1980
and 1992 to 7.5Vo, due to the oil shock, debt crisis and sizable
reduction in foreign direct investments. This being much below
the country's potential, the government introduced structural
economic reforms followed by a stabilization plan in 1993,
including trade liberalization, deregulation which included
elimination of a number of quota and import restrictions, and
large-scale privatization of government enterprises. GDP grew
to 57o in 1993, after years of recession and low growth.
Considerable progress in the free trade within the MERCOSUR
bloc (Agreement between Argentina, Brazil, Paraguay and
Uruguay to form a common market), accounted in 1994 for
about l4%o of Brazil's trade.

During all these years of boom, recession and recovery,


the Brazilian copyright industry sector which in regard to its
music industry unit sales and retail sales value had declined
29Vo in 1992, grew steadily from unit sales of 32 million and
retail value of US$247 million in 7992 to unit sales of nearly
108 million with retail value of US$I,199 million in 1997, the
sixth highest in the world after the United States, Japan,
Germany, the United Kingdom and France.16 Likewise, in the
book publishing industry the annual book title production grew
from 13,684 in 1990 to 51,460 in 1997, while the turnover in
book publishing grew from US$930,960 in 1993 to

'6 Cf. The Recording Industry in Numbers,1998, published by the


lnternational Federation ofthe Phonographic Industry (IFPI), for all
figures ofunit and retail sales value ofprerecorded music quoted in
this Chapter.

76
Chapter 4 Protection of Cultural Industry and Traditional Knowledge

US$1,845,000 in 1997.1'Brazil also has the largest informatics


and telecommunications market in Latin America. The use of
information technology resources, particularly in relation to
local production capacity and skilled human resources, has
substantially increased. The National Program for Software
Export (SOF'[EX Mall), which aims at a share of l7o of the
software world market during the very beginning of the present
century, supports software development centers with equipment
and information services for local software developers. The
software industry has contributed positively to Brazil's
economy. In 1998 sales of packaged software were US$1.76
billion; the industry generated over 71,500 jobs and US$622
million in fiscal contributions.

ln Chile, where the GDP growth fell from 7O.3Vo in 1992


to 6Vo in 1993 and to 4.57o in 1994, the economy was
liberalized with fostering the role of the private sector, and with
the adoption of adjustment policies and cautious economic
management, the objective of sustained GDP growth of over 5Vo
was expected to be achieved. Much depends, in the medium
term, on the evolution of trade and world economic growth.
Despite considerable export diversification, copper continues to
account for a very large percentage of exports and fluctuation in
its price does tell on the economy. Meanwhile, there is a
conscious effort to encourage the use of the intellectual property
system. Prerecorded music sales have risen between 1991 and
1997 from 7.7 million to 10 million in unit terms, and from
US$32.7 million to US$99.9 million in retail value. The annual
book title production, however, showed a decline from 4,977 in
1994 to 2,093 in 1997, the turnover in the book publishing
sector being US$57,863 in 1997 . Sales of packaged software in

t' Cf. El libro,No. 86, July-December 1998, CERLALC (Centro Regional


para el Fomento Del Libro en America Latina y el Caribe) i.e.,
Regional Centre for Promotion of Publishing Industry in Latin
America and the Caribbean, for all book publishing figures quoted
here and in the following pages.

77
Socio-Economic Benefits of IP Protection in Developing Countries

1998 were US$120.5 million, the jobs generated by the industry


were over 4,900 and fiscal contributions amounted to US$41
million.

In Colombia, with considerable natural resources,


including oil, natural gas and coal, as well as minerals i.e.
nickel, gold and emeralds, and sizable private sector, effective
macroeconomic management and structural reforms were
expected to increase economic growth. This was particularly so
with the two recently discovered new oil fields, which were
expected to help in GDP growth of more than 5Vo through the
medium term. The copyright protected industry, particularly
music sales in unit terms rose from 6.7 million in 1991 to
21.2 million in 1997, while retail value increased from
US$20.5 million to US$236.1 million in the sarne period. In
book publishing, the annual book title production went up from
2,139 in 1991 to 6,447 in 1997: the number of copies published
was, in 1995, nearly 34 million, and the turnover was in 1997
US$158,212 in this sector. Sales of packaged software in
Colombia during 1998 amounted to US$153.6 million with jobs
generated being over 5,600, and fiscal contributions of that
industry coming to US$48 million.

In Mexico, with economic reforms since the late 1980s


leading to opening up of the economy, public enterprise
privatization (from nearly 1200 in 1982, to around 200 already
in 7994), deregulation of industry and improvement in the
regulatory framework for investment, foreign direct investment
had risen from US$2.2 blllion in 1988 to US$18.9 billion in
1992. The reform program having also succeeded in reducing
inflation from l59%o in 1987 to 87o by end 1993, the economic
growth prospects of 5Vo were expected in the medium to long
term. Meanwhile the intellectual property system and its use in
the service of creativity promotion have been well developed.
In 7997, the unit sales of prerecorded music were 68.5 million
while the retail value of these amounted to US$472.3 million;
the book title production in 1996 was ll,57o; the number of

78
Chapter 4 Protection of Cultural Industry and Traditional Knowledge

copies of these published were 88 million. Insofar as the


software industry is concerned, the sale of packaged software
during 1998 amounted to nearly US$520 million, the jobs
generated being nearly 19,600 the same year and fiscal
contributions being US$ I 85 million.

In Venezuela, with its considerable natural resources and


potential, the music industry registered unit sales of 5.9 million
in 1997 with the retail value being US$82.7 million. The annual
book title production was 2,5(X with the number of copies
published in 1997 being 13 million. Sales of packaged software
in 1998 were around US$128 million, jobs generated in that
industry being about 4,600 and fiscal contributions being over
US$49 million.

Among smaller countries of Latin


America, a good
example is the development of the cultural industry in Uruguay,
a country member of the MERCOSUR bloc. According to a
recent study entitled "La cultura del trabajo" by a research
center in Montevideo,l8 around 65,000 persons (out of a total
population of just over 3 million) were employed in the
activities of the cultural industry in Uruguay. In 1995, the
contribution of this industry to the GDP was estimated at 2.9Vo
according to the same study, and the turnover was over
US$527 million. This was more than the turnover of a number
of important industries in that country.

Some of these already published figures are mentioned


here especially because it is felt that a general realization is
lacking that copyright industries in a number of developing
countries are also a sizable proportion of their respective GNP
and are by no means a negligible portion of the economy. They
are also substantialjob providers; hence the necessity to protect
them through strict and effective enforcement of the national
18 The authors are Luis Stolovich, Graciela Lescano and Jos6 Mourelle. The
study was reported in Busqueda, of July 29, 1999.

79
Socio-Economic Benefits of IP Protection in Developing Countries

copyright laws, which latter should provide for really stringent


penal provisions.

Folklore and Traditional Knowledge

While discussing the protection of copyright or the


cultural industry and protection of culture per se, with its
effective enforcement, we need also to consider an important
element of the cultural heritage, in particular in a number of
developing countries, viz. the protection of folklore and of
traditional knowledge.

Many developing countries recognize folklore as a means


of self-expression, of social identity and a living and ever
developing tradition, rather than just a memory of the past.

With the spectacular development of technology, and


with newer and newer ways of using both literary and artistic
works and expressions of folklore, improper exploitation
through, for example, audiovisual productions, phonograms,
their mass reproduction, broadcasting, cable distribution, etc.,
has multiplied.

Folklore is commercialized without due respect for the


cultural and economic interests of the communities in which it
originates. And, in order to better adapt it to the needs of the
market, it is often distoted or mutilated. At the same time, and
often, no share of the returns from its exploitation is conceded
to the communities, which have developed and maintained it.

In an era increasingly marked by the globalization of


trade, culture and communications, we are witnessing a
convergence between the formal intellectual property system,
on the one hand, and "informal" systems for protection of
traditional knowledge, innovation and creativity, on the other.

80
Chapter 4 Protection of Cultural Industry and Traditional Knowledge

These systems have been, until recently, integral, highly


developed, effective within their spheres, but existing in virtual
independence of each other. Their convergence results from
two consequences of the current globalization processes,
namely, the growing relevance of intellectual property to an
increasing number of countries and users, and the expanding
recognition that traditional knowledge and folklore are valuable
economic and cultural assets within the global information
society.

In a number of developing country regions, folklore and


traditional knowledge are rich and diverse sources of creativity
and innovation. Further, the traditional knowledge systems are
frameworks for continuing creativity and innovation in most
fields of technology ranging from traditional medicine to
traditional agricultural practices, and extending to music,
design, and the graphic and plastic arts. Traditional knowledge
is considered by its holders as a constantly renewed source of
wealth, both as an economic asset and as cultural patrimony.

Interestingly, intellectual property issues related to


traditional knowledge often cut across the conventional
branches of intellectual property law, such as copyright and
industrial property. In many cases, traditional knowledge
holders do not separate "artistic" from "useful" aspects of their
intellectual creations and innovations; rather, both emanate
from a single belief system, which is expressed in daily life and
ritual. This crosscutting, as it were, between different branches
of the intellectual property system, certainly makes for
complexity. In order to help better understanding and wider
consensus, it seems necessary to address basic conceptual
problems and test practical solutions to the protection of
folklore and traditional knowledge.

The 1967 Stockholm Diplomatic Conference for revision


of the Berne Convention for the Protection of Literary and
Artistic Works made an attempt to introduce copyright

81
Socio-Economic Benefits of IP Protection in Developing Countries

protection for folklore also at the international level. Article


15(4) of the Stockholm (1967) and Paris (1971) Acts of the
Berne Convention, according to the intentions of the revision
conference, implies the possibility of granting protection for
expressions of folklore.

It appeared, however, in the discussions during the years


that followed that copyright law may not, after all, be the right,
or certainly the only means of protecting expressions of
folklore. This was because, whereas an expression of folklore is
the result of an impersonal, continuous and slower process of
creative activity exercised in a given community by consecutive
imitation, works protected by copyright must, traditionally, bear
a mark of individuality. Traditional creations of a community,
such as folklore designs or patterns, may often not fit into the
notion of literary or artistic works. Copyright is, generally
speaking, author-centric and, in the case of folklore, an author-
at least in the way in which the notion of "author" is conceived
in the field of copyright-is not the same.

Because the existing system of copyright protection was


not adequate for the protection of folklore, attention turned to
the possibilities of a sui generis solution.

Following the meeting of WIPO's Governing Bodies in


1978, and the concern among developing countries on the need
to protect folklore, the International Bureau of WIPO prepared a
first draft of sui generis model provisions for intellectual
property type protection of folklore against unauthorized uses
and against distortion.

Meetings of experts convened by WIPO in cooperation


with the United Nations Educational, Scientific and Cultural
Organization (UNESCO) from 1980 led to the adoption in 1982
of the "Model Provisions for National Laws on the Protection of
Expressions of Folklore Against Illicit Exploitation and Other
Prejudicial Actions" (referred to as the Model Provisions).

82
Chapter 4 Protection of Cultural Industry and Traditional Knowledge

Since the definition in the said Model Provisions


(Section 2) of the term "expressions of folklore," international
legal instruments in other fields have increasingly used terms
such as "traditional knowledge, innovations and practices"
(Convention on Biological Diversity, Article 8(i)), or
"indigenous knowledge, cultures and traditional practices"
(Draft UN Declaration on the Rights of Indigenous Peoples,
Preamble), which refer generally to a broader range of subject
matter (including, for example, medicinal knowledge) than that
which is covered by the term "expressions of folklore" in the
Model Provisions.

The WIPO Program for the 2000-2001 biennium uses


both terms, namely "expressions of folklore" and the
"traditional knowledge, innovations and creativity" so that the
scope of inquiry extends to all of the tradition-based creativity
and innovation of human beings, irrespective of existing
terminology or definitions.

Meanwhile, recognizing that basic conceptual


groundwork and systematic data collection were required to
assess the intellectual property aspects of protection of folklore
and traditional knowledge, WIPO, as a Specialized Agency of
the United Nations responsible for the promotion of intellectual
property worldwide, was mandated in its 1998-1999 Program,
to undertake exploratory groundwork in order to provide an
informed and realistic analysis. It did this as part of its
workplan for 1998-1999, through, inter alia, also a series of 10
fact-finding missions in the South Pacific, South Asia, Southern
and Eastern Africa, North America, West Africa, Arab
Countries, South America, Central America and the Caribbean.
From the dialogue these missions had with a wide spectrum of
persons covering traditional knowledge holders, government
officials, research institutes, non-governmental organizations,
museums, community organizations, village councils, further
follow-up action would need to be and is being pursued.

83
Socio-Economic Benefits of IP Protection in Developing Countries

One aspect of traditional knowledge which has received


special attention is "indigenous knowledge," i.e. the knowledge,
innovations and creativity embodying the traditional lifestyles
of indigenous peoples. WIPO has also been exploring the
possibilities of utilizing existing centers of excellence for the
identification, collection, documentation and management of
expressions of folklore. Some of such centers that exist in
developing countries could serve as nucleuses of regional
approaches to the conservation of folklore.

WIPO's exploratory work in this context has shown


that folklore and traditional knowledge are rich sources of
creativity and innovation, which justify the development
and implementation of a highly focused workplan. The
issues are complex and it is necessary also to address
certain basic conceptual problems and to test practical
solutions to the protection of folklore and of traditional
knowledge.

84
CHAPTER 5

Global Information Networks,


Electronic Commerce And
Intellectual Property

Global information networks are expanding at a very


rapid pace. Electronic commerce, digital transmission, the
superhighways, the national information infrastructure (NfI), the
global information infrastructure (GII) and the Internet are just
examples of a volcanic eruption of ever emerging technologies.
All these modern infrastructures will play a key role in the
national competitiveness of developing countries. These are not
merely "btzz words" as a well-known international expert in the
field of intellectual property once said. These could adversely
affect invention, innovation and creative productivity, if
intellectual property rights are not effectively protected through,
inter alia, modernized legislation that would keep in step with
technological development, and if there is no political will to
enforce such protection.

With the explosion in the use of electronic commerce, it


has "become a subject matter of major economic and policy

85
Socio-Economic Benefits of IP Protection in Developing Countries

importance. The number of users and the range of applications


of the lnternet have undergone an enornous expansion in recent
years and have led to a rapid gowth of the commercial interest
in, and commercial activity on, the Internet. The satisfactory
handling of intellectual property issues is of central importance
in maintaining a stable and positive environment for the
continuing development of electronic commerce. Intellectual
property both affects and is affected by electronic commerce in
a multitude of ways."le

The Internet which can be described as a, or the, network


of networks, continues its remarkable expansion and has
millions of users connected. An ever-increasing number of
people throughout the world are being connected to the Internet
in almost all countries. While the United States of America still
has the large majority of Internet users, the number connected in
the other parts of the world is also rapidly increasing. Between
1993 and 7996, the number of Internet hosts in Europe
increased by about 6OOVa, and the growth of these in Africa and
Asia during the same period was about 84OVo for each of these
regions.'o

The World Wide Web, a key component of the Internet,


has enabled all forms of expre55isn-tsxt, sound and images-
to be shared on the Internet. Consequently, the purposes for
which lnternet is now used cover the full range of human
activity: research, education, social communication, politics,
entertainment and cornmerce. Approximately, 200 million

Cf. pages 23-24 of WIPO's Program and Budget presented by the Director
General of WIPO to the Assemblies of the Member States of WIPO in
September 1999.
Cf. David N. Townsend, "Regulatory Issues of Electronic Commerce:
Briefing Report," to the 8th Regulatory Colloquium, 1998, of the
Intemational Telecommunication Union; also Global Internet Project,
Internet Foundations : Breaking Technology Bottlenecks, at
http://www.gip.org.

86
Chapter 5 Global Information Networks, Electronic Commerce and IP

people " are now stated to be regular users of the World Wide
Web, although this figure is growing exponentially, and by the
very beginning of the 21" century, this number is expected to
more than double. The number of lnternet users worldwide,
was expected to grow to one billion by 2005.

The Internet presents unique challenges and also unique


opportunities. However, the lack of technical know-how,
equipment and infrastructure remains a fundamental barrier in a
number of developing countries. With the vast number of
problems already facing developing countries, priority for
Internet infrastructure and services is understandably difficult.
The Internet potential is thus still largely untapped, particularly
in developing countries, and may remain so without a more
comprehensive approach to investments and project
implementations.

The Internet is affecting the way in which people


communicate, the way in which they express themselves, the
way they learn, the way they do business and the way in which
they interact culturally. It is becoming increasingly affordable
to be connected to the Internet and thus to be able to participate
in the advantages that it offers. The telecommunications
infrastructure is improving constantly and the cost of computer
equipment continues to decrease. The estimated worldwide
installed base of PCs in the home and in education increased
from about 36 million units in 1992 to 118 million units in
1997.22 The lnternet is fast becoming a popular, rather than
elitist, medium.

According to the President of the International


Intellectual Property Alliance (IIPA) "as we witness the dawn of

2t Estimate as of August 1999. Source: NUA Internet Surveys.


" Cf. World Informition Technology and Services Alliance (WfSa),
Digital Planet-The Global Information Economy (October 1998),
p.20.

87
Socio-Economic Benefits of IP Protection in Developing Countries

the Information Ag", the information and entertainment


industries lead the way in economic growth and trade. That
growth will accelerate into the 21't century, provided that piracy
is significantly reduced, other market access barriers are
eliminated, and the Internet is made secure for the transmission
of valuable copyrighted material. If we succeed with this
agenda, global electronic commerce can realize its full
potential." (Cf. footnote 7 at p.59-60)

The Internet, however, does not have a central point of


authority and control. Compared to other social institutions, it
has developed in a spontaneous manner. Its technical
development has been guided by protocols established through
participatory decision-making processes by bodies such as the
Internet Engineering Task Force (IETF) and its subcommittees,
and the Internet Assigned Numbers Authority (IANA). There
has not been a central rule-making entity that has exercised
comprehensive legislative authority over the Internet. It is
multijurisdictional. Users can access it from any place on earth.
Information could travel through various countries or
jurisdictions in order to reach its destination. It is a global
medium transposed on the historical system of separate physical
jurisdictions.

The Internet is unspecifically regulated, and is affected by


legislation and regulations that apply generally within the
various jurisdictions of the world. But until now there have
been few exercises of national legislative authority specifically
directed at the Internet and there are no international legislative
instruments specifically designed to regulate the Internet.

These characteristics of the Internet entail several


consequences for the formulation of policy in relation to any
facet of the Internet's operation. The multijurisdictional and
multifunctional nature of the Internet means that, inevitably,
many different interests in many different parts of the world will
be concerned with any endeavor to formulate specific policies.

88
Chapter 5 Global Information Networks, Electronic Commerce and IP

Special care needs to be exercised to ensure that any policy


developed for one interest or function does not impact unduly
on, or interfere unduly with, other interests or functions.23

The "Internet economy" is transforming life,


communication, commerce and learning more visibly than most
technical changes or business in history.

The Internet is an excellent vehicle of global electronic


commerce; such commerce, especially on the lnternet, is
growing at an exceptionally rapid rate and is expected to reach a
level of about US$200 billion by the year 2005.

In a medium that caters to such an enorrnous volume of


commerce, euestions have arisen or are arising as to the
licensing techniques for use over the Intemet of the material
protected by intellectual property rights, and the role of
technological measures such as encryption and electronic rights
management information systems such as digital identification
numbers. Again, insofar as intellectual property rights are
concerned, there arise questions as to the jurisdiction that
applies to the various forms of infringements, as well as
consideration of different technical means for protection of
these rights on the Internet, and the need to constantly review
the use of the Internet in the administration of these rights and
in promoting access to information and transfer of technology.

However, it is clear in this situation that effective


enforcement of intellectual property rights is essential.
Information made available to the global information network is
readily accessible simultaneously in every country of the world;
hence it is a challenge in some ways to the present intellectual

" Cf. "The Management of Internet Names and Addresses: Intellectual


Property Issues," Report of the WIPO Internet Domain Name Process.
http:/flVIPO2.WIPO-int April 30, 1999.

89
Socio-Economic Benefits of IP Protection in Developing Countries

property system, in which rights are enforced on a territorial


basis.

Internet is both an opportunity and a challenge. Its


impact on the existing intellectual property system arises also
from the fact that commercial users of global electronic
cornmerce could be subject to the laws of many counffies
simultaneously; this has implications concerning protection,
administration and enforcement of intellectual property rights in
international commerce. These implications need examination
in the new environment and possibilities for international
dispute settlement alternatives need to be designed for
intellectual property disputes in global electronic commerce.

It is frequently being said that modern society is about to


change into an "information society." It seems obvious that this
sector will be predominantly based on the collection,
organization, distribution and exploitation of information. The
term information must, in this respect, be understood in its
widest sense. It covers news, facts and figures such as are used
as scientific source material and background material for
decision-making in the traditional economic sectors. It has also
a wider coverage, embracing the provision of a vast array of
services, including administration, communication and
entertainment.

The enormous capacity of digital networks (the so-called


digital superhighways) established as a result of the
convergence of computer and telecommunication technologies
has made interactive on-demand services possible. These new
technologies are contributing to the development of what is
referred to as the global information infrastructure, which is the
foundation of the new information society.

This information society will react far into our daily lives
and will provide access to all forms of expressions of human
ingenuity and creativity.

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Chapter 5 Global Information Networks, Electronic Commerce and IP

The Internet and the World Wide Web, as we know today


are only glimpses of what can be expected in the coming years.
Computer transmission and electronic reproduction will change
the way information is treated as intellectual property.

However, the information society will only be a reality


after significant investments. Most people would, in this
context, consider such investments as those connected with the
establishment of communication lines, including satellites and
fiber optic cables, and the acquiring of computer processing and
storage capacity. While there is no reason to underestimate
such investments one needs also to be aware of the even bigger
investments that are required in order to provide the contents,
namely the information and services. The fact remains that the
services of the information society can only be established if
they are in demand, since no one will invest in the necessary
hardware, unless there is attractive information available, which
can only be reached, or which can be reached most
economically, by means of that hardware. In short, the contents
and services are really the key elements for investment.

The provision of the contents is not without its costs. The


investments necessary to create databases, computer programs,
audiovisual productions and other variety of information are
significant, and like any other investment they are only possible
if there are suitable legal provisions which enable recovery of
investment and leave also a reasonable margin of profit. In this
respect, the relevant legal provisions are required to be covered
through intellectual property laws. With this in mind, it is
necessary to consider how the protection of industrial property
and of copyright and related rights will work in the information
society; as well as the effects of digital technology on the rules
for example for the protection of copyright and related rights
and the need to harmonize national legislation and international
protection. In other words, consideration is necessary as to the
national policy for the basic infrastructure, transmission and
dissemination of information, including the role of the state and

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Socio-Economic Benefits of IP Protection in Developing Countries

of private enterprises and the rules governing the functioning of


this infrastructure as also the principles of interregional and
international cooperation in this field.

As the 21't century begins, new technologies have been


posing problems which will have both quantitative and
qualitative effects on intellectual property rights. Such
problems caused by the development of new technologies are
not a new phenomenon. These had arisen in the past with the
introduction of the radio, the cinema and television. Then, the
technologies further developed with computer software,
computer-created works and databases, computer storage and
retrieval and new uses of works, including home taping that is
private recording and copying of phonograms and videograms,
reprography, transmission by cable, satellite broadcasting, and
more recently, with digital distribution systems as a result of the
advent of digital networks like the Internet.

With the development of some of these technologies an


enornous variety of information from all over the globe is being
unleashed through high-speed communications systems,
supported by computer links via the information infrastructure
and the Internet. While the global information infrastructure is
as yet in its initial stages of development, the pace of overall
technological progress is transforming the world economy.

Developing countries need increasingly to link


information technology with their core developmental issues.
Governments in developing countries should make the best use
of information technology also for poverty alleviation.
Information and communication technologies, including cable
distribution, computer software, etc., have become the crux of
modern economies the world over, and are already having and
will increasingly have a considerable impact on the creation,
reproduction and dissemination of protected works, and in
programs for the modernization and strengthening of the global
intellectual property system.

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Chapter 5 Global Information Networks, Electronic Commerce and IP

Multimedia embraces a large variety of products and


services and is a combination of the text of books, photographs,
music, videos and computer programs taken together for being
used on a computer. The essence of multimedia production is
that all kinds of works and contributions are included in the
same production in digital format. Emphasis should be placed
not only on the digital format, but also on the inclusion of all
kinds of works and other contributions (as well as possibly also
non-protected data) in the same format. Multimedia products,
as a rule, are collections or compilations.

The making available of multimedia products and


services has been greatly facilitated by the considerable
improvement in the capacity and capability of personal
computers. Computer software has an important role to play in
the operation of multimedia products.

In the field of creation, especially multimedia creation,


one of the problems posed is that usually many creators of
works will be involved to create a multimedia work. While it
may be a group of authors (e.9., a writer, a photographer, a
sound expert/composer, a film director) working together, in
practice this is not always the case. Often, the creator of a
multimedia work will want to use preexisting material, and in
some cases he may want to modify or adapt the works or part of
the works that are chosen. From the copyright point of view,
the rights of reproduction, adaptation and perhaps the moral
rights of the author come into play, since transformation of the
work may, in certain cases, be such that it causes prejudice to
the author's reputation.

Unlike analogue technology, for instance reprography or


videotape recordings, the switch from analogue to digital
technology is increasingly being used in consumer electronic
products from audio-players to video cameras. Companies
which have semiconductor technology-the key to
digitalization-and also make consumer products, are benefiting

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Socio-Economic Benefits of IP Protection in Developing Countries

from it. The digital format affects the creation as well as


communication and diffusion of works. Thus works and
material stored in the digital medium can be communicated by
cable, particularly fiber optics, and received with perfect
quality. It is these communications networks that are, as
mentioned earlier, often referred to as the national information
infrastructure or the information superhighway. Such a
superhighway will permit or enable interactive communication
with the interactive user, that is, the user, viewer or listener.
The user can, at his home, ask for and receive a musical work, a
text or a film or any other work by getting in touch with a
digital database linked to a telephone system or cable.

This kind of distribution of works upon request, through


digital databases, is raising problems on a different level and
scale. The impact of such distribution of works on copyright
will be quite considerable; since the works would be easy to
reproduce without degrading the quality of the original, action
against unauthorized reproduction would be difficult to enforce
and jurisdiction will be increasingly called into question. Thus,
with the advent and application of digital technology, and the
digital delivery systems, the international community is
accosted with qualitatively new issues in respect of the creation,
dissemination and use of works protected by copyright and
related rights.

Infrastructure in the information society context refers to


systems that provide the basic telephone and communication
services. The global information infrastructure of course covers
not only telephone and telecommunications networks, but also
mobile telephone and cable companies, satellite
telecommunication agencies, broadcasting organizations.

From the legal point of view, the question is as to how


such "transmission on demand" is to be dealt with, and several
possibilities have been mooted and considered. These include

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Chapter 5 Global Information Networks, Blectronic Commerce and IP

the application of existing rights of reproduction,


communication to the public, or distribution.

Meanwhile, as has been referred to earlier, fiber optics


and the merging of the telephone, the computer and the
television, are making instantaneous communications possible
globally. The moves towards an information society are also
being expedited through technological development in the
telecommunications field. The volume of information that
could be communicated is increasing enornously through also
the use of fiber optic connections, which will enable the digital
communication networks to handle many, in fact numerous,
channels simultaneously. Almost all the traditional types of
works such as literary works, music, photographs, audiovisual
works, computer programs, are increasingly going to be
available in digital form. The digital format, as mentioned, not
only affects creation, but also communication and diffusion of
works, which can be received with the quality of the original.

The speedy creation, through the use of digital


technology, of digital versions of works originally produced in
the analogue domain, for example sound recordings, motion
pictures, and the capacity to produce an enornous number of
low-cost distortion-free copies, raise questions regarding the
recognition of new rights relating to the creation of digital
copies of existing works, concerning the need for legal
structures, as well as the rights associated with broadcasting,
where the recipient of the broadcast signal will have the ability
to make any number of copies of the material broadcast, as
concerns the cooperation between rights holders and
manufacturers and distributors of equipment that will have the
capacity to create, reproduce and manipulate digital
information.

With the increasing sophistication of electronic devices,


the intercommunication between the various communication

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Socio-Economic Benefits of IP Protection in Developing Countries

systems, i.e., the fax machines, telephones, television satellite


dishes and computers, are developing enormously.

It is obvious that in the information


society, technical
controls will be essential to augment copyright provisions, in
order to help prevent unauthorized onJine access and use.
Those providing the service can fix a time-based or copy-based
fee for the various items a user wishes to access. A number of
on-line services are increasingly competing to make their own
agreements with authors of works and their representations for
distribution of individual works online.

As a very eminent international copyright specialist has


very aptly described "the answer to the machine is in the
machine."z Under this heading, in a report entitled "The
Publisher in the Electronic World," prepared for the IPCC in
1994, the same author set out the scenario as follows:

"The questions surrounding the electronic use of


copyright materials are not so much 'How shall we prevent
access and use?' as 'How shall we monitor access and use?'
Generally speaking, intellectual property is made available to
the public so that it can be used, and mechanisms which simply
prevent use eventually defeat the very reason for which the
material was created at all. After all, to publish is to make
something available. to the public. The real issue is to link
identifying, monitoring, control and reward. The ideal is a
system which can undertake several different tasks, preferably
all at the same time. A system must be able to identify
copyright materials, to ffack usage, to verify users, and to record
usage and appropriate compensation. In addition, the system
should provide security for the integrity of the copyrighted

u Charles Clark, General Counsel, International Publishers Copynght


Council (PCC); the IPCC is the joint copyright policy arm of the
International Publishers Association (IPA) and the International Group
of Scientific Technical and Medical Publishers (STM).

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Chapter 5 Global Information Networks, Electronic Commerce and IP

material (freedom from tampering) and some level of


confidentiality and privacy for the user. It might also provide
the user with a price list showing various costs for different uses
of individual materials along the model of a retail
establishment."

Numerous encryption and license management


technologies currently have been or are in the process of being
developed. These will increasingly become essential for the
security of works and of data protection in a networked age.

Collective management organizations for protection of


copyright and related rights, as discussed in greater detail in
Chapter 9, are an important requirement in the global
information network. A collecting society could in the future
also establish an on-line service that would authorize those
wishing to access its member authors' works, to establish an
account with the said society and enter into an on-line
agreement concerning royalties due for the work used.

Insofar as digital networks are concerned, when a work is


stored in a computer from which it can be retrieved, it is
considered a reproduction. As to the rights to be applied to
retrieval on demand, there are two possible approaches, which
are actually considered for application in certain countries and
regions.

The first approach is to concentrate on the process of


transmission. On the basis of this approach, it might seem
appropriate that it be treated as the exclusive right of
authorizing any communication to the public of an author's
works. This would embrace the making available to the public
of the works, by wire or wireless means, in such a manner that
members of the public may access these works from a place and
at a time individually chosen by them.
Dissemination/transmission of a work in a digital format should
constitute a form of communication to the public.

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Socio-Economic Benefits of IP Protection in Developing Countries

The other possible approach is to concentrate on the


result of transmissions, namely that copies are obtained in the
receiving computers. On the basis of this approach, the
application of the right of distribution is considered to be
justified. It is probably one of the most fundamental
consequences of the application of digital technology that the
borderlines among the right of reproduction, the right of
distribution and the right of communication to the public are
getting blurred. It is due to this hybrid nature of digital delivery
that the idea has grown of a so-called "umbrella solution," the
essence of which would be to only provide in any international
norrns, that the owners of rights have an exclusive right to
authorize the making available to the public of their works in
any way mentioned above, and leave the legal characterization
of such an act distribution or communication to the
-whether
public-to national laws.

As to the law that would apply ininternational


transactions, for example if one infringes the right in a work on
a computer in the United States and the work is retrieved and
copied, for instance, and a print is made in India over the
Internet, which law would apply to such infringement and
which court would be competent, are questions yet to be settled
internationally.

Insofar as protection of encryption is concerned, and as


concerns devices for breaking encryption of ffansmission, the
general view seems to be that it should be prohibited to
manufacture, import, sell or distribute such devices for breaking
encryption. There seems a general consensus on the need of
provisions on the use of technical security measures and on
prohibiting devices and services that may be used to defeat such
measures. Some legislations make it illegal to manufacture or
provide devices that circumvent encryption or other
technological measures for protecting copyright owners in
respect of their rights. However, there still seems to be a need
for consideration of some details in this context; for instance, to

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Chapter 5 Global Information Networks, Electronic Commerce and IP

ensure that limitations on copyright are not set aside through


technical protection.

As for identification of works, the first practical need


would be to establish identification of norms for works and right
owners. A computerized identification system would be
necessary for payment of dues, and not only to make sure that
systems used by each are compatible, but also both for right
holders through their collective managements, as well as for
users who could be thus enabled to identify the holders of rights
and obtain the necessary authorization from them.

It also appears that under the global information


infrastructure with its digital distribution systems and
multimedia works, the distinctions among the rights of authors,
producers and performers, which were the basis of separation of
copyright and of rights neighboring on copyright, are rapidly
and seemingly losing the earlier importance.

There is also the question whether the new multimedia


works in the digital era are rapidly bluning the lines between
types of works and types of rights, leaving the transmission
rights somewhere between the performance and distribution
rights as mentioned above. A deeper consideration of this
would probably lead to the conclusion that perhaps aspects of
both are involved. Not blurring the lines but rather taking
several rights in use for the same phenomenon, viz., a
transmission on demand.

As far as international norms for the protection of moral


rights in the world of digital communications are concerned,
these rights as enshrined in an international copyright
convention may become more important because of the greater
possibility of manipulation.
However, all these problems and many others are
international in their dimension and need international solutions.
Time was when guidelines or model provisions could provide

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Socio-Economic Benefits of IP Protection in Developing Countries

the way for the development of the system in an international


context. Multilateral norns that would be adhered to, accepted
by, and binding on the largest possible number of member
states, is perhaps the answer now so that different national
solutions are not legislated and applied to these problems
created by the new and ever developing technologies. One of
the recent multilateral norns laid down and now accepted by
over 135 countries is the TRIPS Agreement. While this
Agreement does provide for the enforcement of rights and for
the settlement of disputes, some of the issues arising out of the
new technologies have yet to be addressed. National laws
would need harmonization with the generally accepted
international standards decided upon multilaterally.

The impact of digital technology on intellectual property


was initially felt in the field of copyright and related rights
(computer programs, compact discs, CD-ROMs, databases,
multimedia productions). Also in view of its growing
availability over the Internet, a WIPO Diplomatic Conference
held in Geneva in December 1996, adopted the two so-called
"Internet Treaties" viz., the WIPO Copyright Treaty (WCT) and
the WIPO Performances and Phonograms Treaty (WPPT).
These treaties contain the most up-to-date norrns in respect of
copyright and related rights; they offer appropriate responses to
the challenges posed by the Internet and electronic commerce to
these rights; and provide a balanced solution for the various
interests involved as also give the required freedom for national
legislators.

While some of the main features of these two new


copyright treaties are indicated in Chapter 9, the improved
protection which will follow from the implementation of these
treaties will be of significant importance to the growing
computer software and cultural industries in a number of
developing countries.

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Chapter 5 Global Information Networks, Electronic Commerce and IP

These will prepare the legal basis for new forms of


exploitation of the products of the cultural industry, through the
Internet, and in the future through even more
advanced Internet-like networks at the national level and, as the
treaties gain increased acceptance, at the global level. Both the
computer software and the cultural industry have vital interests
in obtaining a high level of protection, particularly when
dissemination of their products changes character because of the
growing importance of network-based distribution.

This change of character has already started, particularly


for computer programs and, to a lesser extent, for sound
recordings. But it will accelerate quickly in the years to come,
and the film industry will feel its impact in a few years.
Therefore, as also mentioned later in Chapter 9, it is necessary
that the decision to become parties to these treaties is not
delayed.

It is important to note that a high level of protection for


network-based dissemination of information and products of the
cultural industries is a necessary precondition for the
establishment of such networks, because without high quality
contents they would not be meaningful, and content providers
would not make their products available without strong
intellectual property rights protection. It would, therefore,
become increasingly difficult to obtain the huge investments
needed for establishing a modern communication infrastructure
(cables, fiber optics, electronic infrastructure in general) without
a high level of protection.

In sum, an advanced communication infrastructure is


becoming an important factor in the development of all sectors
of the economy in a rapidly networked and integrated world.

Between the two main branches of intellectual property


rights, copyright and related rights seem perhaps more affected
and concemed by electronic commerce than industrial property

101
Socio-Economic Benefits of IP Protection in Developing Countries

rights, since most of the works protected by copyright and


related rights may be transformed into digital signals and
transmitted over the lnternet, while the majority of products to
which industrial property rights apply are delivered in tangible
form and therefore, they are only involved in partial (or indirect)
electronic commerce.

The global information network, however, offers the


possibility of quicker, cheaper and more reliable ways of
administration of, and information on, intellectual propety
rights. Development of skills and competence in the
administration and management of intellectual property rights
needs greater attention and focus in view of the increasingly
global dominance of a knowledge-based economy.

Recognizing the remarkable progress and the strategic


importance of these emerging technologies, the World
Intellectual Property Organization (WIPO) has launched a major
program to develop and establish a global information network
of its own, known as WIPOnet, and provide a wide range of
intellectual property information services over this network.
WIPO's contribution in the area of information and
communication technologies as symbolized by the Internet, in
the context of developing countries, is thus in the shape of the
WIPOnet, which lays the foundation for a globally networked
intellectually property community. WIPOnet will be an Internet
based network that will provide connectivity to intellectual
property offices around the world, and offer a secure
environment for exchanging confidential intellectual property
data and for electronic commerce applications. It will facilitate
access to intellectual property data, and will also serve as a
platform for establishing new services. Some of the web-based
services already introduced include the WIPO's Distance
Learning Program for its Worldwide Academy (referred to at
pages 177-178), the WIPO Intellectual Property Digital Library
(IPDL), broadcasting of some WIPO meetings over the Internet,

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Chapter 5 Global Information Networks, Electronic Commerce and IP

Online Dispute Resolution System for Internet Domain Names,


and the Electronic Bookshop.

WIPO's Digital Agenda, as per its work program with


respect to e-commerce, the digital economy and intellectual
property, seeks to broaden the participation of developing
countries through the use of WIPOnet and other means, for
access to intellectual property information, participation in
global policy formulation, and opportunities to use their
intellectual property assets in e-commerce. It also covers
legislative framework to facilitate e-commerce, and online
procedures for filing and international applications for the
Patent Cooperation Treaty (PCT), the Madrid Agreement
Concerning the International Registration of Marks (Madrid
Union) and the Hague Agreement Concerning the International
Deposit of Industrial Designs.

Electronic commerce having acquired increasing


importance with the growing expansion of the Internet,
measures are needed to constantly deal with various intellectual
property issues in order to maintain and strengthen the stability
of the operating environment that is needed in this context. It is
imperative to find globally workable solutions and to ensure the
security and strengthening of intellectual property rights over
the Internet. WIPO has stepped up measures on different fronts
to tackle some of these issues, which apart from the conclusion
in 1996 of the "Internet Treaties" (the WIPO Copyright Treaty
and the WIPO Performances and Phonograms Treaty), also
include the development of an online, Internet-based dispute
resolution system, aimed at the resolution of disputes involving
intellectual property and the abusive registration of an internet
domain name arising from "cybersquatting." It needs to be
noted, however, that conflicts between domain names and
trademarks present unusual features that stretch the capacity of
the ordinary judicial system. That system is also territorially

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Socio-Economic Benefits of IP Protection in Developing Countries

based, so that it cannot always provide a comprehensive


solution to a conflict with a global dimension.

The WIPO Arbitration and Mediation Center is


establishing a special procedure for obtaining interim relief.
The procedure will be available for adoption by parties, on an
optional basis, as an additional feature of arbitration under the
WIPO Arbitration Rules. Mediation being an extension of
direct negotiations between the parties to a dispute, conducted
with the aid of a neutral intermediary, the mediator, is becoming
a preferred mode of dispute resolution in many of the most
important markets of the world, including in developing
countries. In respect of disputes concerning, for example, a
license, franchise, research and development, sound recording
or film production conffact, mediation offers a reasonably cost
effective, non-confrontational procedure for dispute settlement.

Some of the more advanced developing countries are


introducing information technology legislation and setting rules
for cyberspace in order to facilitate e-commerce and e-
governance. The 27"' century will see an increase in,
knowledge-based industries like the information technology
industry and greater utilization of knowledge management.
Most industry modernization projects in a number of developing
countries today are e-savvy and conscious of their intellectual
property rights protection while surfing the world for joint
venture projects. Enabling cyber legislation, rules and
regulations have to be put in place for facilitating the growth of
information technology industries and e-business ventures since
it helps to have legal sanctity for transactions through the net.
Electronic commerce has a great potential for future success of
business and industry.

In a rapidly networked and integrated world and an


expanding market for Internet services, information technology,
electronic commerce, and intellectual property, need constant
global dialogue and global solutions. It is more than ever

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Chapter 5 Global Information Networks, Electronic Commerce and IP

necessary for developing countries to be prepared not just for


new problems and challenges, but also for the enorrnous new
opportunities that the 21" century will offer with its technology-
driven economy and electronic commerce potential.

As very aptly remarked by the President and Chief


Executive Officer of the Business Software Alliance,
"Electronic cofftmerce promises a new revolution in the
development, distribution and use of products and services
protected by intellectual property. It also poses monumental
new risks. The WIPO Treaties, strong reproduction and
communication rights, technical measures, practical track-down
and take-down procedures, and cooperation among intellectual
property owners and technology and service providers can, as
the software industry's experience has shown, help make the
enforcement of intellectual property rights, and thus the healthy
development of e-commerce, a reality." zs

Governments in developing countries would need to


adopt some pathbreaking measures and a proactive role in
ensuring the effective protection of intellectual property rights

'5 Cf. "The Impact on Intellectual Property: Jurisdiction, Enforcement and


Dispute Resolution." Paper presented by Robert Holleyman, President
and Chief Executive Officer, Business Software Alliance (United
States of America) at WIPO's International Conference on Electronic
Commerce and Intellectual Property, Geneva, September 14 to 16,
1999.

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Socio-Economic Benefits of IP Protection in Developing Countries

and monitoring of infringements of those rights with effective


enforcement mechanisms that are essential for the healthy
development of electronic corunerce and of intellectual
property rights in the future.

106
CHAPTER 6

Innovation Management And


Research And Development
Activity; Importance Of Small And
Medium Enterprises In Its
Promotion; Interaction With
National Industrial Property Offices

Invigorating domestic efficiency of innovation


management is extremely important in the context of a
growingly open and competitive global economy, with greater
opportunities for investments and exports. There is need to
encourage an increasingly demanding qualitative management
of the productive sector in order to maintain the confidence of
national as well as external markets.

While the integration of the developing countries in the


international economy affords also through export earnings, an
opportunity to improve the welfare of the people, over the long
term, the road to such integration is not without its speed-
breaking bumps, as are already witnessed in some developing

to7
Socio-Economic Benefits of IP Protection in Developing Countries

countries.

As business research advances and with growing


investment in research and development, the business policy of
industry and enterprises will have increasingly to be concerned
with their inventions being protected. Small professional cells
may have to be created and grow with each important industry,
to encourage their employees to flag their inventions for the
protection of their intellectual property rights. It is ultimately
essential for developing countries to develop their own brands
of technology.

There is often a lack of appreciation of the important


economic and technological impact that intellectual property
rights protection can have on enterprise management and
competitiveness. Its effective protection helps increase the
efficiency with which inventive activity can be generated and
used through encouraging the creative initiative of employees in
enterprises and business, and through investment in research,
development and marketing.

Enterprises should, in the present competitive world,


develop, as mentioned earlier, a deliberate policy of
encouraging their employees to invent, securing protection for
their inventions and checking on and avoiding infringing the
rights owned by others; keeping in touch with the patent
activities of competitors; acquiring the latest technology
through patent licensing contracts.

Enterprises both large as well as medium and small, stand


to gain a great deal through their employees' inventive activity
and should provide incentives for the employee inventors
through monetary awards, promotions or special remuneration.

An enterprise that encourages invention development


activity, producing regular patentable inventions, would do well
to earmark to a management official the overseeing of all

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Chapter 6 Innovation Management; SMEs and IP Offices

innovative activity, and processing of protection of their


inventions through the patent system. Smaller industries not
having regular inventive activity should, through a designated
official, ensure that in addition to his other work, he keeps the
management posted with worthwhile new ideas as these arise.

Enterprises dealing with the state-of{he-art technology


and which may not have necessary familiarity with intellectual
property regulations and law may need a professional adviser to
give expert advice, to interpret the patent laws, clarify their
application to the field of technology and to assist in the
required follow-up. Such a professional should help identify
inventions made within the enterprise and handle their
registration according to the law, and should also have
infringement searches undertaken, to check if patents owned by
others might be infringed by the process or product being
developed by the enterprise. Such SMEs would do well to think
in the long term and use the best available patent/trademark
expertise they can find. An enterprise, which invests in research
and development, must also protect its investment.

An enterprise while protecting its inventions through


patents should secure their protection in countries where the
markets are significant to its trade in the particular invention.
Patents are, at present, protected in around 160 countries. While
national filing of a patent for invention is normal, foreign filings
are expensive and costs are hiked up due to translation charges,
foreign agents fees, etc. It is therefore always advisable to
decide on this after considering likely market demands,
licensing possibilities, and enforcement diffi culties.

At the enterprise level, of course, the management tools


for protection of inventions and innovation would need an in-
house discipline of confidentiality; the generation and
enforcement of official titles of rights for patents and
trademarks, as well as the necessary agreements when
cooperation with others is involved.

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Socio-Economic Benefits of IP Protection in Developing Countries

Confidence in the industrial property system has


strengthened links between business and the universities and
R&D institutions; it has encouraged industries and business to
turn to researchers in universities and R&D institutions for
various consultancy requirements. There is also the need for
research institutions and university research to strengthen links
with national enterprises and to evolve programs and activities
directed towards research oriented to enterprise needs. On the
other side, university researchers and those in R&D institutions
through their increased contacts with business and industry get
the required stimulus for their work.

There is increasing need to promote such interaction in


the context of seeking and retaining export markets and
directing production patterns to this end. Weak internal
linkages that inhibit the efficiency of the product sector will
have to be corrected. The intellectual property system could act
as a "facilitator" for the framework of a stimulating relationship
between the universities, the R&D institutions and industrial
enterprises.

Innovation management should involve obtaining and


providing patents protection not only for high technology
developments but also for all incremental improvements,
provided they are new, non-obvious, and capable of industrial
application. Particularly if an enterprise has been investing a
great deal of money, time and manpower in the inventive
process, the amount spent on acquisition of a patent will not be
wasted; it can be regarded as part of overhead costs (such as
insurance, depreciation etc.) and also as an investment towards
ensuring further profits of the enterprise.

In a number of countries, quite a few manufacturing firms


have their own industrial property departments or divisions
which obtain and furnish to their engineers and technical staff,
advice on latest technology trends, R&D priorities, patenting

110
Chapter 6 Innovation Management; SMEs and IP Offices

strategies, as well as detailed information about new inventions


published each year through patent documents, which as
mentioned earlier, are well over one million. Patent documents
are the largest available and a unique source of technological
information concerning the background of the invention, a
detailed description of the invention, the state of the art, and in
most cases provide a concise background of technological
progress in the field concerned. They are easily accessible, give
a host of commercially useful information concerning owners of
the patented technology, information regarding the prior art,
working of the invention, the countries in which the said
invention is protected, and the duration of the protection.
Eighty percent of all technical developments worldwide are
disclosed only in patent documents and in the descriptions
contained therein. Almost all the technical details one finds in
patent documents are never published anywhere else.

Well over 40 million patent documents have been


published in the world and over one million new inventions are
documented each year. The collection and computerization of
such patent documents and information can help (a) avoid costly
duplication of effort in research and development of ideas
already developed, (b) solve given technical problems, and
(c) inform enterprises concerning the products their competitors
may have developed or are developing. [n order to encourage
inventive and innovative activity amongst their technical staff,
the corporate sector and enterprises as well as research
institutions have a valuable base of information to turn to when
required.

Technological information is an element of fundamental


importance in the process of technology transfer. It is vital not
only in the creation of indigenous technologies but also in the
identification, evaluation and selection of foreign technologies
for local use.
Since patent documents include the major advances in the
field of almost all technologies, the information found therein is

111
Socio-Economic Benefits of IP Protection in Developing Countries

invaluable in providing up-to-date and reliable data, in relation


to a particular technology transfer transaction.

An effectively used industrial property protection system


has often led to shifts in costs linked with technology
development to the private sector of the economy. The public
funds thus released could then be diverted to provide the
necessary basic needs of the community at large.

As business grows, more small and medium-sized


enterprises (SMEs) are established. With growing investment in
R&D, the business policy of SMEs will increasingly be
concerned with their inventions being protected. Small but
highly professional cells will undoubtedly be created and grow
with each industry to protect their intellectual property rights.

In the Republic of Korea, for example, near Daeduk,


about 160 kilometers south of Seoul, the government has set up
an International Intellectual Property Training Institute (PTD
which, inter alia, helps in the intensive training of personnel
working in the patent branches of industries. The SMEs in this
area, as elsewhere in that country, are encouraging their
engineers to develop new technology, and are taking steps to
handle innovations rapidly to maintain their novelty and ensure
that newly developed technology is properly protected. The
business strategy is to help and assist R&D, supply patent
information to technical personnel and motivate further the
increasing of R&D activity.

The sophisticated techniques adopted and the


development of human resource by certain SMEs in the
Republic of Korea with the realization that intellectual property
protection is becoming increasingly important in world trade,
are just an example from a developing country. Some SMEs
there have, in their patent branches, subsections dealing with
patent prosecution, patent licensing, patent strategy and legal
affairs. It is not necessary to go into the details here, but this

112
Chapter 6 Innovation Management; SMEs and IP Oflices

shows where some countries of the developing world are also


going.

If an enterprise has been investing a great deal of money,


time and manpower in the inventive process, the amount spent
on acquisition of a patent will not be wasted; it can be regarded
as part of overhead costs (such as insurance, depreciation, etc.)
and also an investment towards ensuring future profits of the
enterprise.

Industry, business and enterprises need to keep closely in


contact with the national industrial property or patent office and
administration.

On the other hand, patent offices, in toduy', context and


that of the future, have an important information function; they
have to keep enterprises, industries and industry associations
apprised and informed about existing rights and new
developments. This is because information about publication of
each patent document could be the basis for new technical
developments by other inventors. It is necessary to build up
gleater information dissemination capacity and functions in a
patent office.

113
CHAPTER 7

Transfer Of Technology-Its
Acquisition And Licensing

Transfer of technology through licensing iurangements is


an important aspect of enterprise management of industrial
property. Transfer of technology agreements, joint venture
irrrangements and other cooperative alliances include licensing
or authorizing the use of protected inventions.

Transfer of technology through licensing agreements or


licensing contracts between those who have invented, tested and
developed the technologies and those who wish to use them, is
an effective way of promoting technology transfer since the
latter is then received from the right source and normally with
the full assistance of the licensor. With licensed technology,
foreign investment will also be stimulated. Again, more
advanced technologies and greater investment would lead to
increased employment and the technical skill of the national
workforce would be enhanced.

tt4
Chapter 7 Transfer of Technology-Its Acquisition and Licensing

The contractual provision of a patent licensing agreement


that grants the license could be reasonably straightforward. The
licensor could record a statement granting an exclusive or a
non-exclusive license to the licensee to use, make or sell, under
a licensed patent, all or a part of the field which it covers or to
which it pertains. The remuneration due to be paid to the
licensor, in this context, could be either a lump sum or a
continuing royalty unit, or a combination of these two. Certain
pitfalls need, however, to be guarded against in negotiating
licensing contracts due, sometimes, to the weaker bargaining
position or lack of experience of enterprises in some developing
countries.

Another aspect to bear in mind is, that it is likely that an


enterprise desiring to acquire patented technology may not have
sufficient skilled employees in the relevant area. The expertise
of the licensor to train the required staff of the licensee may be
necessary and it would be useful to have this included in the
licensing agreement.

In this context, it might be worthwhile including in the


license contract that the initial technology transfer takes place at
the licensor's industrial unit or base headquarters where the
technology concerned is actually being utilized. This has its
own advantages. Firstly, the complete documents and records
of the licensor concerning the technology will be easily
accessible for use and informing in detail of the personnel of the
licensee and for their examination as necessary. Secondly, the
technical staff concerned of the licensor would be available for
discussion providing clarifications as necessary concerning the
technology and its application; this would be further facilitated
by their actually also being able to see to the machinery,
equipment, procedures, techniques and production process to
help in understanding of the technology being licensed, and
thirdly, for being able to witness the actual practice of the
technology at the licensor's base.

115
Socio-Economic Benefits of IP Protection in Developing Countries

The licensing contract should provide for the transfer to


the licensee of drawings, specifications, and descriptive details
of the application of the technology concerned. The technical
representatives of the licensor could then visit the licensee's
plant to help in the technology application.

Certain matters that would need to be covered are a clear


definition of the basic technology; improvements to that
technology; limitations on its exploitation; validity of the
patent being licensed as also the supply of goods and
components under the license, for use in the exercise of the
licensed rights.

Such agreements or licensing contracts not only allow the


exploitation of the legal rights protected in respect of patents,
trademarks, designs, etc., but also concern providing of
expertise and other technical assistance on the exploitation of
those rights.

Investors and licensors are relatively more interested in


investing in and transferring technologies to a country whose
economy is growing and where production costs are relatively
low. The transfer, in this context, of the emerging technologies
would help as an indispensable part of a developing country's
strategy to foster its technico-economic growth and
development.

While the technology gap remains, many developing


countries, racing against time in the process of their socio-
economic development, have been drawing on the storehouse of
technological information available through patent documents,
in the process of catching up to bridge the gap.

Considering that from the early 1990s quite a number of


developing nations in the world recorded a reasonable rate of
growth, and considering the role of technology in economic
development, the desire to acquire the latest technology is

116
Chapter 7 Transfer of Technology-Its Acquisition and Licensing

obvious. Effective intellectual property protection, it must be


repeated, plays an important role in attracting technology
transfer and in obtaining the desired range of technical
knowledge available in other parts of the world. The
introduction of the latest technologies in the productive sector
plays a critical role in economic growth, as well as in the effort
to increase per capita national income.

Within a country itself, sophisticated research-based


innovation which should aim at using the initial transfer of
technology to originate worthwhile technology nationally, is
stunted by lack of adequate intellectual property rights
protection that could adversely affect technological competition.

The complexity of the technology sought to be acquired


through licensing conffacts naturally influences the form and
type of ,urangement. If the technology is specific, a licensing
contract would be preferred. If the technology to be acquired
envelopes a whole production complex, a turnkey arrangement
is often considered. But, as is known, since in turnkey contracts
the contractor is responsible for the design, construction and
commissioning of the plant concerned, it often fails to develop
indigenous technological capacity, which is perhaps more
constrained in a turnkey contract than in a licensing
arrangement. The via media often leads to preference for joint
ventures-an association between enterprises involving joint
undertaking or commercial activity or project, whether it be
contractual joint venture or equity joint venture.

Transfer of technology and its acquisition through


licensing agreements supports a very legitimate activity, assists
in the creation of jobs, as well as helps increase the geographic
area of sales.

t17
CHAPTER 8

Industrial Property
And Environmentally Sound
Technologies

With the increasing techno-economic development in


developing countries, the economic value of intellectual
property protection also consists of keeping the environment
free from pollution to the extent feasible. For access to
environmentally friendly technologies, the developing countries
could use patent information available through patent
documents which, as mentioned, are a very useful source of the
most up-to-date technological information in the world.
Technological information can be obtained from many sources,
but none provides as broad and as up-to-date coverage of
technological information as do patents.

Publication of the content of an invention through patent


documentation provides the necessary incentive to inventors to
patent yet other and newer technologies. From patent
documents one can obtain the relevant technical details
describing the invention, as also whether it can or cannot be

118
Chapter 8 Industrial Property and Environmentally Sound Technologies

freely used, and if not, the identity of the owner who could be
approached for authorization to use the invention concerned.

Developing countries would, in the context of sustainable


development, need to have an increasing recourse to the use of
environmentally sound technologies. National patent offices
will not only need to develop new capabilities but will and
should be called upon to furnish information on the state of the
art. Measures will need to be taken to encourage access to
environmentally sound technologies on terms, which are
favorable to the transferee and fair to the transferor.

In this context it is important to note certain relevant


factors, namely, that not all inventions are protected, that is, for
which patents have been granted; such of these inventions
which are not protected, can be freely used by anyone, since
they are in the public domain. In regard to inventions that are
protected, the rights of the owners of the invention or the patent
holders to make, use, sell or import the product which includes
the invention, are limited in time-the duration in most
countries being 20 years. Besides, the scope of the protection is
limited territorially; in other words, the patent holder has the
rights only within the boundaries of the country, which has
granted the patent. As comparatively much fewer patent
applications are filed in developing countries than in
industrialized countries, and as a result fewer patents are
granted in developing countries, many inventions including
environmentally friendly ones can be used freely in developing
countries even if these are protected in industrialized countries.

While clarifying this important aspect of the problem, the


other side of the medal has also to be clearly seen and
understood. There is undoubtedly need also for access to the
latest of environmentally sound technologies, available with
developed countries, which may still be covered by patent
protection and yet be required for environmentally sustainable
growth. Constantly improving technological inventions are

119
Socio-Economic Benefits of IP Protection in Developing Countries

making environmentally sound technology increasingly


attractive also economically. Thus there appear to be fewer
advantages from using older technologies. Affordable funding
for enabling transfer of such technology is cenainly an issue.
Small and medium-sized enterprises, especially, are often
unable to make the necessary investments required for use of
such technology. This problem is also more pressing in high-
debt countries or in those with limited foreign exchange.

Governments in some developing countries were staying


their hand at strengthening or enforcing environmental
regulations, particularly since it is realized that enterprises
would find it financially difficult, if not impossible, to comply.

In certain cases, technology transfers could be a part of


large capital projects. As mentioned in a recent (December
1998) United Nations Report on Financing the Transfer of
Environmentally Sound Technologies, "pollution prevention
technologies, or more environmentally sound technologies do
not have an environmental label on them, as they are simply
more modern or efficient process technologies deployed by a
range of sectors...Linking enhanced corporate competitiveness
and productivity to investments in cleaner production
techniques and technologies is a powerful, if not indispensable,
means of advancing economic development...The use of
environmentally sound technologies offers developing countries
the opportunity to 'leap frog' many of the problems encountered
by the developed world, and to enhance competitiveness
without compromising the environment."

A number of studies have, however, shown that a very


sizable percentage of industrial pollution can be prevented
through economically profitable procedures and cleaner
production practices.

The rate of economic growth in a number of developing


countries has also enabled enterprises to pay increased attention

120
Chapter E Industrial Property and Environmentally Sound Technologies

to better the eco-efficiency of their operations. Due to improved


economic development, the World Bank has estimated that, for
example, 85Va of Asia's installed industrial base and abofi7O%o
of its energy-producing capacity will be new. Plant
modernization and investment therein, particularly as new
processes are more efficient, and depend on more materials
recycling than the older technologies, usually leads to lower
pollution intensities.

The increase in private capital flows to developing


countries, has been directed more at the newly industrializing
developing countries, where also the need for latest
environmentally sound technologies is the most.

However, in view of the need to promote qualitative


competitiveness in industry, enterprise and trade, developing
countries would also have to concentrate on reducing barriers
and providing specific incentives for the transfer of privately
owned environmentally sound technologies. Incidentally,
Agenda 2l as formulated at the United Nations Conference on
Environment and Development (UNCED) in Rio de Janeiro in
1992 (now coordinated by the United Nations Commission on
Sustainable Development and implemented through national
and local authorities) recommends, in the case of privately
owned technology, the purchase of patents and licenses on
commercial terms for their transfer to developing countries on
non-commercial terms, as part of the program of cooperation for
development, taking into account the need to protect intellectual
property rights. The said Agenda also recommended promoting
long-term collaborative arrangements between enterprises of
developed and developing countries for the development of
environmentally sound technology, for promoting cooperation
in, and related to, such technology transfer, as well as for
building a trained human resource pool and infrastructure. The
technical assistance in the field of environmentally sound
technologies should be tailored to the actual needs of the
development process in developing countries.

t21
Socio-Economic Benefits of IP Protection in Developing Countries

The above-mentioned Agenda 21 also recommends


promoting joint ventures htween suppliers and recipients of
technology, taking into account developing countries' policy
priorities and objectives. Together with direct foreign
investment, these ventures could constitute important channels
for transferring environmentally sound technology, and sound
environmental management practices, which could be
transferred and maintained. Sustainable economic growth
requires necessarily environmentally sound economic growth.

Environmentally sound technologies should be


compatible with nationally determined socio-economic, cultural
and environmental priorities. There is need for favorable access
to and transfer of environmentally sound technologies, in
particular to developing countries, through supportive measures
that promote technology cooperation and enable transfer of
necessary technological know-how as well as building up of
economic, technical and managerial capabilities for the efficient
use and further development of the transferred technology.
Technology cooperation involves joint effort by enterprises and
goveflrments, both suppliers of technology and its recipients.26

The availability of scientific and technological


information and access to and transfer of environmentally sound
technology are essential requirements for sustainable
development. A large body of useful technological knowledge
lies, as mentioned at the very beginning of this chapter, in the
public domain. There is a need for the access of developing
countries to such technologies as are not covered by patents or
lie in the public domain.

"Tapping this pool of knowledge and recombining it with


local innovations to generate alternative technologies should be
pursued...Enhanced access to environmentally sound

'u Cf. Agenda 21 as adopted by the UNCED Plenary in Rio de Janeiro on


June 14, 1994.

t22
Chapter E Industrial Property and Environmentally Sound Technologies

technologies should be promoted, facilitated and financed as


appropriate, while providing fair incentives to innovators that
promote research and development of new environmentally
sound technologies. Governments and international
organizations should promote effective modalities for the access
and transfer in particular to developing countries of
environmentally sound technologies through formulation of
policies and programs for effective transfer of such technologies
that are in the public domain and creation of favorable
conditions to encourage the private and public sectors in
developing countries, to innovate, market and use
environmentally sound technologies."2T

27 Op.cit.,Chapter 34,p.2.

t23
CHAPTER 9

Modernization Of National
Intellectual Property Legislation
And Administration; Strengthening
Of The Intellectual Property System
For Technological Development;
Strong Patent Information System;
International Protection Of
Intellectual Property: Advantages
For Developing Countries

A well-enforced intellectual property system and


modernized administration are essential components for
promotion of socio-economic growth.

There is already a growing recognition that in order to


benefit from the optimal use of the system, developing countries
would need also to improve on their regulatory framework, laws
and services, which will help increase inventive activity.

124
Chapter 9 Modernizing and Strengthening of the IP System

It is necessary to enhance basic awareness, upgrade


legislation, and strengthen infrastructural facilities, and to fill in
the many gaps that still remain in these areas.

With ever increasing technologies, legislation is, with the


time taken in the formalities of its modification, a pace or two
behind. Laws cannot, and nowhere have been, static. They
have to be in step with constantly emerging technologies and
with the developing countries' own national economic needs
and technological growth compulsions as well as international
commitments. Hence the obvious necessity of constantly
updating and modernizing intellectual property legislation,
particularly in the context of the TRIPS Agreement, and
especially since a large number of developing countries are
already members of the World Trade Organization (WTO) and
hence parties to that Agreement, while others will also become
members.

The journey from GATT (General Agreement on Trade


and Tariffs) to the Agreement on TRIPS (Trade-Related
Aspects of Intellectual Property Rights) was long and
checkered. From 7948, when WTO's predecessor GATT was
established with 23 countries signing the initial Second World
War agreement for trade liberalization, to 1986, there were
seven negotiating rounds to promote trade. The eighth and
largest trade negotiations in world economic history and also the
first in which developing countries played an active role, started
in Uruguay in September 1986, and ended in December 7993,
extending over seven years.

Meanwhile, the world economy having increasingly


become an interdependent, borderless economy the differences
in the intellectual property protection systems between countries
were being brought to the fore, calling for the inclusion of
intellectual property rights for the first time in trade
negotiations. The TRIPS Agreement was finalized after certain
ameliorations were sought and obtained by the very able

t2s
Socio-Economic Benefits of IP Protection in Developing Countries

negotiations from developing countries, and included in the


Final Act of the Uruguay Round, which seemed a good enough
starting point and base for building export trade in developing
countries. During the last half of 1993, prior to the signing of
the GATT's Uruguay Round Agreement, it was clear that few in
our developing countries believed that keeping out of the
multilateral trade agreement and having to undertake bilateral
trade negotiations, with each of the other 116 negotiating
countries then (now there are quite a number more) would be at
all realistic or feasible. Too much was involved in the deal for
most developing countries' economies, to allow objections to
strengthening of intellectual property rights to be given into,
especially as these were largely by certain limited interest
groups.

It was clear by then that in the post-GATT era, the


national, industrial property and copyright legislations in a large
number of countries, including the industrialized and
developing countries, would need to be revised. For instance,
according to a document containing a study prepared by the
International Bureau of the WIPO for the then GATT
Negotiating Group on Trade-Related Aspects of Intellectual
Property Rights, including Trade in Counterfeit Goods, and
issued as a GATT document under number
MTN.GNGA\fGntWD4lRev.l., it was clear that during the
Uruguay Round negotiations for finalizing the TRIPS
Agreement, patent protection in a large number of countries,
including in some industrialized countries, was excluded for (a)
pharmaceutical products by 49 countries; (b) plant varieties by
44 countries; (c) food products by 35 countries; (d) chemical
products by 22 countries. Computer programs were also not
protected under intellectual property legislation in 32
countries.28

" Cf. WIPO document WO[NF/29 of September 1988 entitled "Existence,


Scope and Form of Generally Internationally Accepted and Applied
[Footnote continued on next page]

126
Chapter 9 Modernizing and Strengthening of the IP System

Most of these countries having since become parties to


the said Agreement, legislative modernization in them was
imperative. Some points in the post TRIPS Agreement era need
to be understood in developing countries in the context of
enlighted long term national economic self interest. It has, in
some cases perhaps, also to be depoliticized and a national
interest position has to be taken. TRIPS should not lead to just
a patent-centric view nor to a pharmaceutical-centric view. It is
clear that legislation in the intellectual property rights context,
for example, cannot remain static in such fields where it is
essential both to keep abreast of the rapidly emerging new
technologies, the diffusion of digital and information network
technology, as also economic and technological growth
compulsions, as well as to be in step with international
developments in this field.

Consider, for example in the patents field, the Japanese


Government, to be in step with emerging technologies and their
economic development needs nationally and internationally, had
revised its patent law about a dozen times between 1945 and
1980 and again recently amended and promulgated its patents
and trademarks laws in 1995, to comply with provisions in the
TRIPS Agreement.

The TRIPS Agreement covers protection in respect of


seven categories of intellectual property rights: (1) Copyright
and Related Rights, (2) Trademarks, (3) Geographical
Indications, (4) Industrial Designs, (5) Layout of Integrated
Circuits, (6) Trade Secrets (TRIPS requires protection of
undisclosed information which has been kept secret; such
protection is not expressly covered by the Paris Convention for

[Footnote continued from previous page]


StandardslNorms for the Protection of Intellectual Properry"; Annex
II, page 96.

127
Socio-Economic Benefits of IP Protection in Developing Countries

the Protection of Industrial Property), (7) Patents (including


microorganisms and plant varieties). Lrcidentally
microorganisms have not been defined in TRIPS, nor so far in
any international convention.

Developing countries needed to modernize their


legislation in the field in trademarks to include provisions for
registration of service marks and well-known marks and provide
for updated protection of layout designs of integrated circuits as
well as a modern geographical indications law meant also to
safeguard rights of traditional commodities.

In the field of patents, modernized legislation needed


basically to provide for a longer-2O years-term of protection;
non--exclusion of excluded items from patentability, such as
chemicals and pharmaceuticals, to include in respect of these for
product and not just process patents; modify compulsory
licensing provisions; provide also for importation to be treated
as working of patents; for protection of microorganisms;
microbiological processes, plant varieties.

As far as legislation recognizing pharmaceutical product


patents in developing countries is concerned, it would have to
be enacted by the end of the transitional period, i.e., not later
than the year 2005. A number of forward looking developing
countries have already revised their patent legislation to provide
for product patents in the pharmaceutical sector without waiting
for the entire transitional period. As the Director General of the
World Health Organization (WHO), Dr. Gro Harlem Brutland,
while addressing the Working Group on the Revised Drug
Strategy in Geneva on October 13, 1998, aptly said, "to develop
new drugs we need an innovative pharmaceutical industry, with
appropriate incentives for innovation and protection of
intellectual property rights. Experience demonstrates that
protection of intellectual property rights goes hand-in-hand with
successful research and development."

128
Chapter 9 Modernizing and Strengthening of the IP System

The introduction of product patents through revision of


will help the national pharmaceutical industry,
patent legislation
in a large number of developing countries, to gear up to
fostering aggressive research and development with a
commitment to drug discovery; to pursue in research for
patentable inventions comprising new molecules; and to tap the
skills and resources of national laboratories, in a true and
meaningful partnership mode to surge ahead. While the
pharmaceutical industry in developing countries will need to
operate in an entirely new business environment in the present
21't century, it will have to encourage new patent-worthy
inventions and exploit them in global markets, for which its
cheaper technocratic skills should make it truly competitive.

According to estimates it takes new drugs up to 10 years


or more from synthesis to marketing, from the laboratory to the
pharmacy. Research on, and production of, new molecules is
complex, expensive, time consuming and often
multidisciplinary. As per the World Development Report of
1993 of the World Bank, it takes US$100 million to bring a new
molecule into the market. Other estimates place this at around
US$250 million or even more. In developing countries with
many pharmaceutical companies already having professionally
competent technical personnel, it will cost much less. It is clear
that for such companies, as also the private sector in this field,
the absence of product patent protection for pharmaceuticals has
provided little incentive to engage in research and development.
lntroducing product patent protection in developing countries
even before the end of the transitional period provided for in the
TRIPS Agreement, as indeed a number of developing countries
have already done, will contribute to innovative research-based
drug producing industry.

The impact of product patents on drug prices would be


minimal during the transition period till about the year 2005.
The prices of drugs already in the market, for instance, will not
be affected by product patent protection. The same applies to

r29
Socio-Economic Benefits of IP Protection in Developing Countries

pipeline drugs already under development and for which patent


applications in other countries have already been filed, will not
qualify for protection. Thus, if drug prices rise, it will not be in
consequence of revision of the patents regime and legislation to
comply with the TRIPS Agreement.

The WHO's list of 250 essential drugs compiled by an


Expert Committee in 1993, showed that 13 were covered by
product patents then, of which only four were considered
"essential." Also by end September 1998, the expiry of
protection dates was expected in respect of l0 of them.
Therefore most of the essential drugs being in the public domain
and not subject to patent protection, providing of such
protection for other drugs will not adversely affect supply of
essential drugs to the needy in developing countries.

Thus product patent protection should have no noticeable


impact on drug pricing. The fear and anxiety generated
concerning a high price rise in this context, it would thus
appear, are not entirely justified, and it is for some of the very
eminent pharmaceutical industry representatives in developing
countries to allay them.

Further, the price premium attributable to exclusivity will


be constrained by major checks and balances, such as for
example, the purchasing power of the patients; therapeutic
competition from similar cheaper unpatented drugs, and above
all, by govemment drug price control orders available under
permanent or reserve powers, in a number of developing
countries. These price controlling powers should ensure that the
national policy designed to secure adequate supplies of essential
drugs at moderate and competitive prices, is not impaired.
Governments can do everything to check prices, as price control
is not prohibited by TRIPS Agreement.

Thus, governments will sooner than later have to comply


with TRIPS in their national legislation. Copying of patented

130
Chapter 9 Modernizing and Strengthening of the IP System

drugs will have to stop by the end of the transitional period.


Phamaceutical industries in developing countries will need to
concentrate more on product development than on reverse
engineering. The focus will have to shift to adaptation, to meet
local requirements, and the process should range from increased
R&D for development of new molecules to collaboration and
joint ventures. National pharmaceutical companies with strong
organizations could also act as licensees or distributors. More
and more international level mergers and joint ventures are
becoming common. Even amongst national companies the
move has already started from mergers of smaller units with
bigger companies in developing countries, both to benefit from
economies of scale as well as for upgrading their research
facilities. Enlightened self interest would be to plan sales
development of important drugs in conjuction with co-
marketing partners. This would optimize market penetration
and profit.

The socio-economic purpose of the patent system is to


provide an incentive to R&D and, in respect of health care, to
ensure better availability of life-saving drugs to treat tropical
and other diseases in developing countries.

In the copyright field, legislations will have to provide for


protection of computer software and to cover technologies
embracing satellite broadcasting, cinematographic films and
sound recording, private copying, home taping, protection of
performing artists by introducing new rights for performers
where they do not exist, and enhancing the protection of works
of fine arts.

In the context of modernization of national intellectual


property legislations, it is germane to mention the legislative
issues in the context of implementation of the TRIPS
Agreement that would, inter alia, have to be given attention to
viz., biotechnology and computer software protection.

131
Socio-Economic Benefits of IP Protection in Developing Countries

Developing countries would need to adapt to the new


sophistications in the intellectual property field, and neither be
afraid nor look back. There is no shortage of inventive,
innovative and creative spirit amongst its peoples.

Legislative and infrastructure modernization will also


encourage the inflow of the newest technologies and be in tune
with policies of economic liberalization in most developing
countries.

Insofar as infrastructure is concerned in the copyright


field, it is essential to set up and/or strengthen collective
management systems through societies of authors and
composers, to help creators of literary and artistic works in their
creative activity, through collection and distribution of royalties
due to them.

The right of an author to exploit his work or authorize


others to do so is a basic element of copyright. Such a right is
equally important for the beneficiaries of neighboring rights i.e.,
rights neighboring on copyright, covering the rights of
performers, producers of phonograms and broadcasting
organizations, also in a wider sense other rights such as the
rights of publishers in the typographical arrangement of their
books. With ever emerging new technologies, the number of
users of an author's works is constantly enlarging and the
coverage of such use is becoming so widespread, that individual
monitoring of the use of his works by an author or authors,
negotiating with prospective users and collecting the
remunerations due, is inconceivable.

Hence the advantage of a collective management system,


wherein the owners of rights authorize collective management
organizations to administer their rights, negotiate with users,
give them licenses against appropriate fees, collect such fees,
and distribute them to owners of rights. A copyright collective

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Chapter 9 Modernizing and Strengthening of the IP System

management system is necessary to provide the required


protection for copyright holders.

It is clear that the control by the owners of rights over


exercise of their rights becomes more or less indirect with
collective management, but if the collective management
system functions well, as it should, the rights will still preserve
their exclusivity, albeit through collective channels, and can
prevail in the fullest manner possible.

A collective management system, while it serves


basically the interest of owners of copyright and neighboring
rights, it is also advantageous for users who are enabled, fairly
cheaply, to have access to works required by them, through the
service provided by such an administration or authors' society.

By the beginning of the z}d, century such authors'


societies (so-called performing rights societies) had been
formed in nearly all European countries and by the end of the
same century, had spread to a number of other countries,
including quite a few developing countries in every region of
what had come to be known as the third world.

To consolidate cooperation and coordination of activities


among these organizations, and to further the protection of
authors' rights worldwide, it was in June 1926 that the delegates
of 18 societies set up the International Confederation of
Societies of Authors and Composers (CISAC)." It now has a
total membership of 192 societies in 98 countries, including in
nearly 55 developing countries. The raison d'€tre of an
authors' society is the collective management of authors' rights.

Under Article 5 of the Statutes of CISAC, only societies


administering authors' rights may be admitted to CISAC as

2e CISAC has its headquarters in Paris


and is headed by a Secretary General.

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Socio-Economic Benefits of IP Protection in Developing Countries

ordinary members; and each such society should be an


organization which, (i) has as its aim, and effectively ensures,
the advancement of the moral interests of authors and the
defense of their material interests; (ii) has at its disposal
effective machinery for the collection and distribution of
copyright royalties and assumes full responsibility for the
operations attaching to the administration of the rights entrusted
to it; and (iii) does not, except as an ancillary activity,
administer also the rights of performers, phonogram producers,
broadcasting organizations or other holders of rights."

For effective and efficient administration of authors'


rights by authors' societies, it is necessary that these rights are
adequately guaranteed by law. "The expression 'authors'
societies' is used not only when real societies fulfill those basic
functions, but also in cases where, for example public or semi-
public organizations do the same."3o

Numerous rights in respect of administration are often


transferred by authors to their publishers under their publishing
contracts. Consequently, optimizing the result orientation of an
authors' society or collective management "can only be
achieved if the publishers are also accepted as members and the
authors' rights they have acquired are thereby transferred to the
copyright society. Recognition of publishers as full members is
now an accepted fact in most European copyright societies,

Cf. WIPO's publication No. 688 (E) of 1990 (reprinted 1993 and 1994)
entitled "Collective Administration of Copyright and Neighboring
Rights" for details. It is a study on, and advice for, the establishment
and operation of collective administration organizations, and as stated
in its Introduction, "the main author of the study is Dr. Mihdly Ficsor,"
then Director, Copyright Law Division, subsequently Assistant
Director General, WPO.

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Chapter 9 Modernizing and Strengthening of the IP System

although authors in other parts of the world..."3r particularly in


some developing countries, still have not included publishers in
the collective management of authors' rights.

"Without the publishers as members, a copyright society


forgoes the most important rights; the publishers themselves
exercise the rights assigned to them by the authors..." It is to be
recoffrmended, therefore, that when "new copyright societies are
set up, the basis should be a partnership between authors and
publishers."32

Again, if possible, such collective societies should have


one administration for covering authors' rights and those in
musical works, and should be duly computerized with
availability of modern equipment.

Just a few points finally in connection with the setting up


and efficient functioning of a collective management of authors'
rights. Such a society or organization must ensure payment of
commensurate amounts to authors and publishers for the use of
their works. It should also help promote public acceptance of
works of its member authors and in this process should identify
those works that could be suitable for international distribution
in markets worldwide. Again, for this very desirable activity in
promoting national cultural creativity globally, the organization
or authors' society needs both competent and well trained staff,
with the necessary legal background, a practical outlook as well
as a cultural flair and understanding.

Finally, and very important for the functioning of an


authors' society is the active and conscious support and

31
Cf. WIPO document CP/DMX/SYMI2, paper entitled, "The Setting-up of
New Copyright Societies: Experience and Reflections," prepared by
Ulrich Uchtenhagen, former Director General, Swiss Society for
Authors'Rights in Musical Works (SUISA), Zurich.
Ibid., foonote23.

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Socio-Bconomic Benefits of IP Protection in Developing Countries

cooperation of the government. This is particularly necessary


since the activities of such a society or organization impinge on
the areas of functioning of certain government departments such
as, for instance, the national radio and television, state cultural
programs, currency regulations, monopoly laws, criminal
prosecution procedures etc. Governmental support will help the
collective management organization or society to respond
optimally to the need for encouraging and promoting national
creativity.

As concerns the management of rights in a digital


environment, there arises also the question of licensing of rights
for multimedia productions. It would evidently be difficult and
time-consuming to get all the various permissions necessary. In
international parlance, the slang "one-stop shop" has come to
mean that one should be able to go to one place to buy the
necessary rights and obtain the needed licenses, that is through
collective management systems. Since, however, certain rights
holders, viz., those of audiovisual works and computer
programs, may not be interested in the collective management
route and might prefer to keep their own control over selling
their rights, the solution appears to be to work both through
collective management for those interested, and individual
management for others not wishing to be collectively managed
and who are able to do their own management, viz., big
publishers/film companies and major software companies.

A good way of ensuring the protection and promotion of


copyright or the rights of authors, composers, and creators of
literary and artistic works, could and should be, as earlier stated,
through collective management of their rights by a national
society of authors and composers. Such societies exist in a
number of countries including developing countries.

There are very efficient societies functioning in Australia,


France, Germany, Japan, Switzerland, the United Kingdom, the
United States of America, as also in Nordic countries, such as

t36
Chapter 9 Modernizing and Strengthening of the IP System

Sweden, to take only a few examples in industrialized countries,


as well as in many of the developing countries of Africa, the
Arab region, Asia and Latin America.

The raison d'dtre for a collective management or


organization is that it is in many areas difficult, if not
impossible, for individual authors or owners of rights to
exercise them individually, owing to the large number of users
of their works; they do not have the possibility to monitor all
the many users because of their number and/or of any special
circumstances relating to them; nor yet, to collect the
remuneration due from them.

In the standard authors' organization, the owners of rights


authorize the collective management to administer them on their
behalf; to monitor the use of the works; to negotiate the
necessary license for use; to negotiate also the appropriate fees
and to distribute them among the owners of the rights.

Suffice it is to say that establishing a national authors'


organization by, or with the help of, government in developing
countries, where such an institution does not already exist, will
greatly serye the interests of national authors, composers and
rights owners in literary and artistic works, films and other
works protected by copyright, as also the cause of fostering
national creativity and national writing, authorship, music,
films, etc. Such an institution with its computerized database,
and collection, distribution, legal and accounts sections, could
greatly help in the administration of authors' rights, in the
collection of royalties due to them, as also in the distribution of
these among the concerned rights owners. Technical assistance
from the UN Specialized Agency viz., WIPO, can and will be
forthcoming. This really needs serious consideration by the
concerned authorities concerned.

Likewise on the industrial property side, at the national


industrial property or patent office level, invention and through

t37
Socio-Economic Benefits of IP Protection in Developing Countries

it technology promotion should be an effective policy concern.


Patents applications need to be processed much more
expeditiously, through computerization and modernization of
the administration and its user orientation, so that indigenous
inventors are encouraged to register their inventions nationally.

The national patent and trademark office or


administration needs to be upgraded to a high-tech institution,
and will also need to be provided with enhanced resources,
accelerated computerization, strengthening of patent
information services and upgrading of levels of authority and
management. Also, where feasible, the patent office might be
made an autonomous self-financing administration, which
should not only be geared to invention promotion, but should
keep abreast of constantly emerging technologies that might
need legislative updating. Part of the funding could come from
fees for patents and trademarks applications.

Closer working relations need to be encouraged between


national and foreign patent offices for exchange of information
and experiences both subregionally and regionally amongst
developing countries, and globally with industrialized countries.

Further, various aspects of patent documents contribute to


their use as a source of information for technological purposes
and they all derive from or are part of the patenting process.
Publication of the content of patent documents and economic
incentives for innovators to patent new technologies are key
components, which make patent information an excellent source
of technological information.

The strength of the patent system as a source of


information derives from the fact that the documents that it
generates are published. Many other characteristics of patent
documents make them uniquely suitable as an information
resource: first, patent documents generally convey the most
recent information and second, patent documents more often

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Chapter 9 Modernizing and Strengthening of the IP System

than not contain information which is not available to the public


in any other form of literature. Third, the information found in
patent documents is generally presented in a fairly uniform
format. The documents highlight the essence of what is new
together with a description of the background of the invention,
i.e., the prior art, together with, in many cases, a review of the
recent technological progress in the particular field of the
invention. ln addition, certain documents are published with a
search report, which normally shows a series of closely related
or pertinent reference that were identified during the
patentability search. Each document therefore discloses not
only the new technology but also provides a useful, and
sometimes complete, background of closely related
technological information. Fourth, patent documents cover,
almost without exception, every branch of technology.

A search of patent literature reveals the nature of the step-


by-step progression of technology. A patent invariably refers to
the existing technology in a given field and then goes to
describe the invention which improves the known knowledge in
that particular field.

Consequently a patent search permits identification of


both trends in research and development as well as the most
recent and leading edge technologies.

Governments might, in the process of modernization of


the national intellectual property system, like to consider setting
up an oversight body at the national level or an inter-ministerial
policy steering group which should, inter alia, have a specialist
study group, to constantly review national and international
developments over the wide area of coverage of intellectual
property, and should keep the govefirment apprised. The policy
steering group should perhaps draw up a national guideline
paper concerning, a five-year plan, for example, of intellectual
property policy. Governments should also consider inducting in

139
Socio-Economic Benefits of IP Protection in Developing Countries

such a policy steering group, representatives of the private


enterprise sector and of the national chambers of commerce.

For effective protection of intellectual property, it is also


advisable and necessary for developing countries to participate
in the international system through adherence to the two main
multilateral freaties, viz., the Berne Convention for the
Protection of Literary and Artistic Works and the Paris
Convention for the Protection of Industrial Property. This is
important, since even a modern updated national legislative
protection applies only within the territorial limits of the country
concerned.

ln the case of industrial property, for the protection of a


patent or trademark in another country, it is necessary to obtain
grant or registration in each such counffy and this entails both
grant or registration and translation costs. The obtaining of
protection is facilitated and rendered more economical where
the owner of the right can use the procedures provided under
separate international treaties subsidiary to the Paris
Convention, whereby a single application can be filed for the
grant of a patent for invention in over 107 countries, or the
registration of a trademark that will be effective also in the
countries participating in the international trademark system.

These subsidiary treaties are the Patent Cooperation


Treaty (PCT) and the Madrid Agreement and the Madrid
Protocol Concerning the International Registration of Marks
(the Madrid System). In order to assist, help and encourage
national inventors and innovators as well as business entities,
participation in these subsidiary treaties is
strongly
recommended. Membership of these treaties does not require
from the government any payment of fees or contribution.

Normally, under the patent system, an inventor would be


required to file applications for each country where patent
protection is sought. Inventors of a country party to the Paris

140
Chapter 9 Modernizing and Strengthening of the IP System

Convention could claim priority of an earlier application for


applications filed subsequently in other countries, but since such
latter applications have to be filed within 12 months of the filing
date of the initial application in one's own country, separate
applications would have to be filed in each country where an
inventor needs protection for his invention, undergoing the
expenses for translation, attorney's fees, registration charges
and other patent office dues, even when the concerned inventor
or enterprise may not be sure if they are likely to obtain a patent
nor sure that the invention is really new, non-obvious and
industrially applicable. Each patent office with which such an
application is filed, is required unless the PCT is used, to
undertake a formal examination of each such application, to
search and ascertain as well as examine in the concerned
technical area of the invention, its possible patentability.

While a degree of commonality is implicit in the


principles and substance of the Paris Convention, the PCT is
distinguished by its recognition that national industrial property
laws differ, and by its respect for this diversity. The guiding
concept is not identical behavior but consistent behavior, based
on the independent laws of individual nations. States do not
contract to promulgate and practice uniformly identical laws.
They agree to act towards each other in a manner consistent
with their respective national laws and practices.

With a view to simplifying and reducing the difficulties


an inventor experienced in the earlier system, the Patent
Cooperation Treaty (PCT) was negotiated and adopted by a
Diplomatic Conference in June 1970. It entered into force in
1978, and became operational from June 1, 1978, when
acceptance of international or PCT applications commenced.
On that date, 18 states were party to the PCT, of whom
interestingly nine were developing countries. Over 2l years
later now out of some 107 states, more than half are developing
countries.

t4r
Socio-Economic Benefits of IP Protection in Developing Countries

The PCT was and is the most significant advance in


international cooperation in the field of industrial property
protection since the adoption of the Paris Convention in 1883.
It is a Special Agreement under the Paris Convention and is
open only to states party to the Paris Convention, which it
complements. It is a treaty which facilitates an inventor,
through filing of a single international patent application in one
language, with one patent office, to seek protection of an
invention in all countries party to the PCT, which the inventor
names or designates in his application.

Adherence to the PCT, and membership in the Paris


Convention would afford invention promotion in developing
countries, the fillip it certainly needs. This is all the more
relevant particularly when after December 1993, the GATT's
Uruguay Round was finally completed and in April 7994, when,
in Manakesh, the Agreement establishing the World Trade
Organization (WTO) was signed and the TRIPS Agreement
became binding on all members of the WTO. This latter
Agreement enjoins on member states, the application and
implementation of all the substantive provisions of the Paris
Convention. It was clear that developing countries seeking
space for their own products in the global markets stand to gain
particularly from such international arrangements. They would
also benefit from heightened investor confidence following
accession to these multilateral international treaties, viz., the
Paris Convention and the PCT.

The latter treaty, the PCT, has a positive role in


innovation promotion. Its system helps an inventor in the
formal examination of his/her/its international application by a
single patent receiving office; ensures an international search of
such application by one of the leading patent offices resulting in
a report indicating the relevant prior art which may have to be
taken into account to determine if the invention is patentable.
Such a report is made available to the inventor applicant and
then published along with the concerned international

t42
Chapter 9 Modernizing and Strengthening of the IP System

apphcation and made available to all patent offices in the


designated states. These designated offices are thus provided
with a report that indicates the state of the art which is relevant
for the determination whether the claimed invention could meet
the criteria for international patentability.

A report is submitted to the applicant and the offices


concerned at the option of the applicant. The international
application is then subjected to an international preliminary
examination, resulting in a report containing a non-binding
opinion whether the claimed invention meets the criteria for
patentability and is properly disclosed, and whether the
description and claims meet the PCT standards.

Again, under the PCT system, an international application


has already been examined as to form by the receiving office,
has undergone a high quality search by the lnternational
Searching Authority, and has been possibly examined by an
International Preliminary Examining authority, by the time it
reaches the national patent office. It thus gives the national
patent offices the much needed benefit of reducing their
workload, making it simpler and less costly, since they have the
advantage and benefit of these international centralized
procedures and do not have to duplicate efforts, in that an
international search report and in most cases, an international
preliminary examination report, would be available for the
national office to carry out its examination.

Among the many advantages offered by the PCT to


inventors and applicants, the following are a few that need to be
specially mentioned.

Firstly, by filing only one application with the national


patent office, it would be possible to obtain the effect of
regularly filed national or regional patent applications for all the
PCT Contracting States designated by the applicant in the
international application.

143
Socio-Economic Benefits of IP Protection in Developing Countries

Secondly, an applicant who is a national and resident of


certain states (mostly developing countries) would be offered a
75Vo rednction of certain PCT fees in respect of international
applications filed under the PCT.

Thirdly, the processing of the international application by


the patent offices of the designated states would not and could
not start until 20 or 30 months from the priority date, thus
giving the applicant eight or 18 months more time than he/she
would have without the PCT to decide whether and for which
countries he/she wishes to pursue patent protection, and
delaying, by the same number of months, the expenses of
translating the application, paying national fees and appointing
local patent agents.

Moreover, the applicant would, as a consequence of the


international search report and international preliminary
examination report, have a clear view before he incurs all of
these expenses, whether it would be worthwhile to continue to
pursue his/her aim of obtaining patents for his/her invention.

These advantages operate not only in favor of applicants;


they are also important for the countries where patent protection
is sought by the applicant and for the national office. Patent
applications received via the PCT route will have been, as
mentioned earlier, subjected to high quality international search
and usually also to an international preliminary examination.
Such applications will be pursued in the national phase only if
the applicant believes that there are sound economical and
technical reasons to do so. Although the number of patent
applications is increasing after a country adheres to the PCT, the
number of patent applications which do not deserve protection
will be reduced, and patents granted on the basis of international
applications will provide a sounder basis for investment and
transfer of technologies.

144
Chapter 9 Modernizing and Strengthening of the IP System

Therefore, more and more applicants are seeking


protection through the PCT especially because the
commercialization of a strong patent granted through this
system is more likely to be facilitated. In this respect the
international publication of inventions subject of a PCT
application plays an important role and are great value in
ultimately assessing the patentability of an invention under the
national law, whether under a system of substantive
examination or under a registration system (in the latter case the
reports would be at the disposal of inventors and industry
seeding for an assessment of the patentability of the invention
and to defend their interests against unjustified patents in the
courts).

Although more applicants would be interested in seeking


patent protection in a PCT Conffacting State, the overall
workload of the national office would not become, as stated
earlier, heavier than before.

The PCT System is a patent filing system not a patent


granting system. It provides for (i) an international phase, i.e.,
filing of an international application, international search;
international publication and international preliminary
examination; and (ii) a national phase before designated
offices. The granting of patents remains the exclusive task of
the national offices in the national phase.

Membership in the PCT does not require the payment of


any financial contributions by Contracting States. On the
contrary, a Contracting State would be entitled to a free copy of
all published international applications, either in paper form or
in CD-ROM format, an invaluable source of the latest technical
information about the most important inventions worldwide, as
well as of all other publications under the PCT. Staff would be
trained in PCT procedures by WIPO.

145
Socio-Economic Benefits of IP Protection in Developing Countries

The PCT route thus offers inventors and member states


considerable advantages, and will surely help developing
countries in the much needed invention and innovation
promotion. Technological innovation is the key to economic
growth and social prosperity. The patent system, through
provision of an exclusive right, ensures legal security. It
provides scientific and technical institutions and enterprises the
possibility of encouraging their employees in using their skills
in research and development of worthwhile new ideas that can
be utilized in constantly improving existing products or making
new products. For invention and innovation promotion,
industry and business should be encouraged to plough much
greater funding in R&D.

Insofar as trademarks are concerned, international


registration provides for the owner of the mark, particularly also
in developing countries, several advantages. After registering a
mark, or filing an application for registration with the national
office, the owner of the mark has only to file one application, in
one language, and pay one fee and in one currency, instead of
filing separately in trademark offices of the various contracting
parties in different languages and paying a separate fee in each
office. Further, the holder does not have to wait for the office of
each contracting party in which protection is sought to take a
positive decision to register the mark; if no refusal is notified
by an office within the applicable time limit, the mark is
protected in the contracting pafiy concerned.

A further important advantage is that changes subsequent


to registration, such as a change in name or address of the
holder, or a change in ownership may be recorded with effect
for several designated contracting parties, through a single
simple procedural step and the payment of a single fee. Besides
there is only one expiry date and only one registration to renew.

International registration is also an advantage for the


trademark offices. They do not need to examine for compliance

146
Chapter 9 Modernizing and Strengthening of the IP System

with formal requirements, or classify the goods or services, or


publish the marks. Moreover they zue compensated for the
work that they perform; the individual fees collected by the
lnternational Bureau of WIPO, are transferred to the
Contracting Parties in respect of which they have been paid,
while the complementary and supplementary fees are distributed
annually among the Contracting Parties not receiving individual
fees, in proportion to the number of designations made in
respect of each of them. In addition, if the International
Registration Service closes its biennial accounts with a profit,
the proceeds are divided among the Contracting Parties. In
1996, the International Bureau of WIPO distributed, for
instance, a total of 23 million Swiss francs among the
Contracting Parties.

The advantages of the Madrid Agreement and its


Protocol are that it will (a) obtain for owners of marks,
protection in foreign countries party to the Agreement or the
Protocol for much less expense, and they will be able to renew
their international registrations for much less expense; (b)
attract foreign investors and international trade since it will be
simple and inexpensive for foreign marks owners also to have
their marks protected; (c) receive from WIPO a share in certain
fees collected by WIPO and in any profits of the Madrid Union.
The yearly amount of these payments will grow gradually and
may be expected to reach several hundred thousands of
U.S. dollars per year after a few years; (d) make savings
possible in the national trademark registry since it will not have
to publish in its Gazette those marks which are subject to
international registration under the Madrid Agreement and its
Protocol, and finally, (e) there are no membership costs; on the
contrary funds from the membership will regularly accrue to the
country.

A systemof international registration of industrial


designs, very similar to the Madrid system as regards
trademarks, is provided by the Hague Agreement Concerning

r47
Socio-Economic Benefits of IP Protection in Developing Countries

the International Deposit of Industrial Designs. Owing to the


wide variety of national legislations in the field of industrial
designs, however, the Hague Agreement has not so far attracted
as many countries as could have been expected. In order,
therefore, to widen the geographical base of the Hague system,
a new Act of the Hague Agreement (known as the "Geneva
Act") was adopted at a Diplomatic Conference held at the
headquarters of WIPO in June-July 1999. The new Act includes
provisions which make the Hague Agreement compatible with
industrial design legislations that provide for the examination of
designs whose protection is applied for as to novelty, while
retaining at the same time the basic characteristics of the Hague
system, namely, simplicity and cost effectiveness. As in the
case of the Madrid system, the international procedure under the
Hague system alleviates the task of offices of Contracting
Parties and provides them with substantial revenues.

The two new treaties adopted by WIPO's Diplomatic


Conference in Geneva in December 1996, viz., the WIPO
Copyright Treaty (WCT) and the WIPO Performances and
Phonograms Treaty (WPPT), referred to in preceding
chapters, will benefit developing countries, particularly in
helping to develop a growing cultural industry.

The WCT and WPPT were adopted with the objective of


developing and maintaining the protection of the rights of
authors in their literary and artistic works, as also the rights of
performers and producers of phonograms, in a manner as
effective and uniform as possible, as mentioned in their
respective preambles; also in recognition of the need to
introduce new international rules, to clarify the interpretation of
certain existing rules, in order to provide adequate solutions to
the questions raised by economic, social, cultural and
technological developments. The adoption of these treaties was
also in recognition of the profound impact of the development
and convergence of information and communication
technologies on (a) the creation and use of literary and artistic

148
Chapter 9 Modernizing and Strengthening of the IP System

works, and (b) on the production and use of performances and


phonograms respectively; as also the need to maintain a
balance between the rights of authors and the rights of
performers and producers of phonograms, and the larger public
interest, particularly education, research and access to
information.

These treaties, viz., the WCT and the WPPT are also
known as the WIPO Internet Treaties. They include the most
upto date norrns in the fields of copyright and related rights, and
respond directly to the "digital agenda" in their provisions
dealing with the application of the reproduction right for the
storage of works in the digital systems; the limitations and
exceptions applicable in the digital environment; technological
measures of protection and rights management information.

The WCT provides for a right of reproduction for authors


by incorporating, by reference, Article 9 of the Berne
Convention (Article I of the WCT). The WPPT provides
explicitly for exclusive reproduction rights, for performers and
for phonogram producers (Articles 7 and 11, respectively).

While the scope of the right of reproduction in the digital


environment is not dealt with in the text of the treaties
themselves, Agreed Statements adopted by the Diplomatic
Conferences state that the reproduction right is fully applicable
to the digital environment, as are the permissible limitations and
exceptions to the right. The Agreed Statements also confirm
that the storage of a work in an electronic medium constitutes a
reproduction as referred to in the relevant articles of the Berne
Convention and the WPPT.

As for rights applicable to transmissions in interactive,


on-demand networks, a significant contribution of the WCT and
the WPPT is their recognition of the rights of authors,
performers and phonogram producers, to authorize the on-line

t49
Socio-Economic Benefits of IP Protection in Developing Countries

transmission of their works, fixed performances and


phonograms.

The WCT and WPPT provide that authors, performers


and producers of phonograms should be granted exclusive rights
to authorize the making available of their works, performances
fixed on phonograms, and phonographs, respectively, by wire or
wireless means, in such a way that members of the public may
access those works, performances and phonograms from a place
and at a time individually chosen by them. The WPPT provides
this right as a "right of making available to the public," while
the WCT includes it in the provision on a general right of
communication to the public.

With respect to an exclusive right of distribution, the


WCT provides (in Article 6(1)), for authors to be afforded an
exclusive right to authorize the making available to the public of
originals and copies of works through sale or fransfer
of ownership. Under the Berne Convention such a right is
granted explicitly for cinematographic works, while the TRIPS
Agreement does not provide for a right of distribution.
Performers and phonogram producers are also granted similar
exclusive rights of distribution (Articles 8 and 12 of the WPPT).

As for rental rights, the WCT provides (in Article 7) for a


right of commercial rental in respect of computer programs,
cinematographic works and, as determined in national law,
works embodied in phonograms, subject to certain exceptions
(Article 7(2) and (3)). The WPPT grants an exclusive right of
commercial rental to performers, as determined in national law,
in respect of their performances fixed in phonograms and to
phonogram producers in respect of their phonograms (Articles 9
and 13, respectively).

As concerns limitations and exceptions, the WCT (Article


10) and the WPPT (Article 16) incorporate the "three-step" test
to determine limitations and exceptions as provided for in

150
Chapter 9 Modernizing and Strengthening of the IP System

Article 9 of the Berne Convention, extending its applications to


all rights.

Importantly, during the preparation of these two new


treaties, it was recognized that in a digital environment any new
rights in respect of digital uses of works would, in order for the
new rights to be effective, require the support of provisions
dealing with technological measures of protection and rights
management information.

The treaties oblige Contracting Parties to


provide
adequate legal protection and effective remedies against the
circumvention of measures used to protect the rights of authors,
performers and phonogram producers in their works,
performances and phonograms. An example of such measures
are encryption systems used by subscriptions broadcasters to
encrypt their signals (Article 11 of the WCT and Article 18 of
the WPPT).

As far as rights management information is concerned,


the treaties oblige Contracting Parties to provide, under certain
conditions, adequate remedies against the removal or alteration
of rights management information and certain related acts
(Article 12 of the WCT, and Article 19 of the WPPT).

The most important feature of these new Internet Treaties


is that they include provisions necessary for the adaptation of
the new international copyright and related rights norrns to the
challenges and requirements of digital technology, particularly
of global digital networks like the Internet and of electronic
commerce. The participation in and use of interactive global
networks based on such technology is in the interest of all
countries and, in particular, of developing countries. The WCT
and the WPPT establish the legal conditions for this. It is thus
in the clear interest of all countries, especially developing
countries, to accede to them.

151
Socio-Economic Benefits of IP Protection in Developing Countries

Finally, it must be stressed here that the modernization of


national legislations on intellectual property to comply with new
international treaty obligations, and upgrading as well as
modernization of the industrial property and copyright
administrations, as also adherence to, and participation in, the
concerned international treaties, plays an important role in the
economic development of developing countries.

t52
CHAPTER 10

Effective Enforcement Of
Intellectual Property Rights

While legislation concerning intellectual property rights


needs to be constantly updated and modernized in order also to
keep in step with the new technologies, it is more than obvious
that even the best laws in the world duly promulgated, but
neatly kept on the shelf, so to speak, are of no use unless they
are efficiently administered and effectively enforced.

Generally, the enforcement of intellectual property rights


involves procedural formalities in a number of hierarchical
forums. Such formalities and procedures are designed to assist
and help the owner of the rights not only to obtain them from
the competent office, but also to enforce them by preventing
their infringement by others, usually competitors.

It is important that legislations in developing countries


provide for stern penal provisions and adequate criminal
penalties for infringement and, it may be said with due respect,
that the judiciary should also appreciate the need for imposing

153
Socio-Economic Benefits of IP Protection in Developing Countries

the maximum punishment in the case of infringements of


intellectual property rights, which alone can help maintain and
enhance national inventive and creative activity as well as
support the innovative spirit of people.

To take as an example from developing countries, quite a


few copyright laws prescribe that unauthorized duplication or
performance of protected works constitutes an infringement
only when undertaken with commercial intent or in the pursuit
of profit. Such provisions are again an indication of legislations
having to be considered suitable for modification to keep pace
with technological development.

The availability of appropriate legislative measures is an


indispensable mechanism for enforcement of intellectual
property rights. The important objective of such measures is the
prevention of acts of infringement and the seizure of infringing
copies, of reproducing equipment and other implements that
could be used for further infringements and those that constitute
essential evidence and could disappear if not brought under the
control of the court.

It should be made possible, under such measures, for


right owners to be granted preliminary injunctions to prohibit
the committing of infringements. Also, courts must be able to
order the search, seizure and temporary impounding of
suspected unauthorized copies of works, and other protected
subject matter, of packaging materials, of implements for the
making of such copies and of documents relating to such copies.

The purpose of civil remedies is (a) to


provide
compensation for the prejudice caused by infringement, (b) to
dispose of infringing copies appropriately, i.e., through
destruction or disposal outside normal channels of commerce,
(c) to dispose appropriately of implements used for infringing
activities, and (d) to grant injunctions to prohibit further
infringements.

r54
Chapter 10 Effective Enforcement of IP Rights

Civil remedies ff€, however, not always sufficient


deterrents. Where infringement has become profitable business,
the closing down of one plant with the assistance of courts and
law enforcement authorities may only mean that the plant may
reopen somewhere else.

Infringements committed willfully and with profit-


making purposes should be punished by criminal sanctions, and
the level of such sanctions must make it clear that such
infringements are serious offenses. The criminal sanctions
could comprise both fines and imprisonment, and where merited
by the case, courts should be able to impose both these
sanctions on the infringer.

No amount of good legislative provisions even for


technical protection could deliver results if the penalty
provisions are inadequate, or yet if enforcement procedures are
cumbersome, slow and costly; these latter need to be
strengthened and modernized nationally. Enhanced penal
provisions have been promulgated since the mid-1980s in a
number of countries. It should, however, be clear that in the
digital environment there is greater need to protect both
creativity and investment. For this it need hardly be reiterated
that intellectual property rights are of little or no use if they are
not effectively enforced.

Enforcement is, in the ultimate analysis, a question of


implementation by the public services, consistency of local
magistrates and an understanding by the concerned national
offices.

The most important contribution governments can make


to the effectiveness of intellectual property rights, is to provide
speedy and cheap methods of enforcing them. Continuity of
socio-economic growth, and industrial and enterprise
competitiveness depend on high levels of protection and its
enforcement. Aggressive and sustained enforcement increased

155
Socio-Economic Benelits of IP Protection in Developing Countries

and extended criminal sanctions and the threat of imprisonment,


prompt and thorough prosecutions can and do deter small
operators from counterfeiting and piracy, especially if
additionally, wide publicity can be given to particular successful
cases. Increased and unchecked levels of piracy could equally
undermine the national economies of developing countries.

In certain countries, penalties are a fine and/or up to six


months imprisonment on summary conviction and a fine and/or
up to two years imprisonment on indictment before a judge and
jury.

Counterfeit and pirated goods should and must be


confiscated and be disposed of. Strict and effective
enforcement of all intellectual property rights is also an
obligation under the TRIPS Agreement, which requires
signatory states to make provisions that would help combat
counterfeiting and piracy. In fact in almost all countries where
the TRIPS obligations are to take effect at the beginning, as well
as very early in the present 21't century, it is in the area of
enforcement that one is to ensure that effective means are
available to rights holders, including expeditious remedies to
prevent infringement as well as remedies that would be a
deterrent to further infringements. Improved and modemized
legislation with increased standards of protection would be like
no protection at all, unless the rights provided in it can be
effectively enforced.

During the negotiations on the TRIPS Agreement, the


need for establishing an international set of obligations for
enforcing intellectual property rights arose largely from the fact
that neither the Paris Convention for the Protection of Industrial
Property, nor the Berne Convention for the Protection of
Literary and Artistic Works, contained detailed obligations
regarding enforcement of their standards of protection.

156
Chapter l0 Effective Enforcement of IP Rights

Articles 15 (Right to Enforce Protected Rights) and 16


(Seizure of Infringing Copies) of the Berne Convention, and
Articles 9 (Marks, Trade Names: Seizure, on Importation, etc.),
10 (False Indications: Seizure, on Importation etc.,) and lOter
(Marks, Trade Names, False lndications, Unfair Competition:
Remedies, Right to Sue) of the Paris Convention are much less
detailed than the enforcement obligations contained in Part trI
of the TRIPS Agreement.

The need for enforcement provisions was felt because of


the increasing inability of rights holders to enforce their patents,
trademarks, and copyrights in various countries around the
world; the inability to obtain, preserve or present evidence; the
increasing delays in bringing a case to trial and obtaining a final
judgement; the inability again to obtain preliminary
injunctions; seizure orders and/or immediate legal relief;
inadequate damage awards and criminal sanctions; and the lack
of enforcement at borders to prevent the importation of
infringing goods.

The enforcement provisions in the TRIPS Agreement


represent a commendable step forward in the protection of
intellectual property rights. The task of elaborating and
delineating a set of obligations which could apply both in civil
law and common law countries, was formidable. The
enforcement provisions of the TRIPS Agreement have
enumerated in some detail the procedures and remedies that
each Member State must make available in its national laws to
enable right holders to enforce the intellectual property rights
established in Part tr of the TRIPS Agreement.

In addition, the Agreement establishes performance


requirements against which each Member's fulfillment of its
obligations to effectively enforce the intellectual property rights
will be measured. The link to Articles XXII and XXIII of
GATT, 1994, in Article 64 of the TRIPS Agreement, raises the
consequences for any nation which might be tempted not to give

r57
Socio-Economic Benefits of IP Protection in Developing Countries

full effect to the provisions of the TRIPS Agreement as required


by its Article 1.

Part III of the TRIPS Agreement (Articles 41 to 61


inclusive) on enforcement contains five sections, i.e., General
Obligations (Article 41); Civil and Administrative Procedures
and Remedies (Articles 4249); Provisional Measures (Article
50); Special Requirements Related to Border Measures
(Articles 5l-60); Criminal Procedures (Article 61).

The general obligations on enforcement in Article 41


require that members must have in place enforcement
procedures that permit effective action against any act of
infringement; in particular, expeditious remedies to prevent
infringement, and remedies which would constitute a deterrent
to further infringements.

The importance of international trade is emphasized by


the requirement that the procedures be applied in a manner,
which avoids the creation of barriers to legitimate trade. In
other words, it should be a balanced enforcement approach that
not only helps trade and free movement of legitimate goods, but
also provides for effective enforcement.

The requirement for expeditious remedies is strengthened


in the said Article by an obligation that enforcement procedures
and measures shall not entail unwarranted delays. Also that
enforcement procedures must not be unnecessarily complicated
or costly. It will be interesting to follow the interpretation of
this obligation. Possibly it will encourage resort to alternative
dispute resolution such as arbitration or court-ordered mediation
in countries where costs of copyright, trademarks and patent
litigation can be excessive.

The TRIPS Agreement clarifies that Part III concerning


enforcement of intellectual property rights does not create an
obligation to establish a special intellectual property

158
Chapter 10 Effective Enforcement of IP Rights

enforcement system nor suggests any allocation of resources


between enforcement of intellectual property rights laws and
other laws (Article 41.5). Notwithstanding this, for example,
Thailand has created a separate IPR Court, whose judges hear
cases, and issue rulings, on intellectual property rights matters.
It is called the Central Intellectual Property and International
Trade Court inaugurated on December 1,1997 and established
under the Act for Establishment of a Procedure for Intellectual
Property and Trade Court 8.8.2539 (1996). With the
increasingly complicated nature of intellectual property rights, it
will be interesting to watch this experiment to see whether it
would become an emerging trend. Article 42 of the said
Agreement obligates Members to make civil judicial procedures
available to right holders to enable enforcement of the
intellectual property rights; and under Article 44, the judicial
authorities must have the authority to prevent an infringement
from occurring and to stop an infringement which has begun.
Article 46 addresses the destruction of infringing goods and
equipment used to manufacture them.

It is clear that counterfeiting and piracy create conflicts


with a developing country's major trade partners and their
control is essential for creating the necessary environment for
foreign investment in high technology enterprises. An
integrated approach to the problem is important. Intellectual
property rights enforcement should be a multi-agency
responsibility that combines frontier and inland measures.

The role of customs authorities, which is an important


factor in effective enforcement of intellectual property rights,
has received formal recognition with the conclusion of the
TRIPS Agreement, also because of the contribution that such
authorities could make in tackling the illegal trade and its
growing internationalization.

Reference has already been made earlier to Articles 5l to


60 of the TRIPS Agreement concerning Special Requirements

159
Socio-Economic Benefits of IP Protection in Developing Countries

Related to Border Measures. These set out the measures to be


taken by the customs authorities to put in place border controls,
in order to intercept suspected counterfeit and pirated goods.

Just as the police and the judiciary, the customs


authorities and administrations have an important role to play in
enforcement of intellectual property rights. In the latter context,
their support role, linking up with the police and other
enforcement agencies as well as with business and trade needs
to be emphasized and enhanced through the necessary
awareness programs. Most intellectual property rights
authorities would also agree that an integrated approach to the
problem is vital.

It
must be noted that even the customs services in
advanced countries often lack the expertise for identifying
infringing goods because of the sophisticated copying methods
being used by pirates and by counterfeiters. In addition they
have the responsibility not to unnecessarily impede or hinder the
flow of legitimate trade. It is important, therefore, to encourage
cooperation between right holders and customs officials, so that
the former could provide the latter with information and
intelligence about imports or exports of counterfeit or illegal
goods. This would then enable customs authorities to use the
information in pursuing their enforcement efforts as effectively
as possible. The necessary controls cannot be effectively
enforced unless there is close and continuing cooperation
between customs and right holders. Such cooperation is an
integral element of successful border enforcement strategy
against counterfeit and pirated goods. Such cooperation
between right holders and the customs should be a continuing
joint effort for ensuring efficient enforcement, and is important
particularly since, for example, modern print technology can
make a pirated edition almost indistinguishable from the
original.

160
Chapter 1.0 Effective Enforcement of IP Rights

In this connection, the World Customs Organization


(WCO), with headquarters in Brussels, earlier known as the
Customs Cooperation Council, which is an intergovernmental
organization with worldwide membership spanning over
150 countries, has been building awareness through seminars in
its member countries. At these seminars expert customs
officials could, together with trade representatives, explain by
showing the real and infringing goods and elaborate on customs
controls concerned with the protection of intellectual property
rights.

The WCO's approach is to have customs authorities


given the necessary powers through legislation adaptable to
national needs and commensurate with the TRIPS Agreement.
This is to help ensure an active and effective role for customs in
combating counterfeiting and piracy in the context of
intellectual property rights' violations. A model legislation,
which was adopted by the WCO Council in 1995, and
subsequently made available to all WCO members, is consistent
with the TRIPS Agreement. While it could be adapted to suit
specific national requirements in respect of differing practices
and legal traditions, the intention was that the basic enforcement
provisions required by the TRIPS Agreement must be provided;
beyond that, individual countries could legislate for enhanced or
stronger legal provisions.

Ifdue legislation in place is considered the first step, the


second and perhaps an important one, according to the WCO, is
the task of achieving the right balance of responsibilities
between customs, business and other agencies, forging, where
possible, a partnership, through a memorandum of
understanding, to tackle the problem.

However rights enshrined in the national legislations for


protection of intellectual property would remain in the statute
book unless effective machinery for enforcing them is built up
and constantly strengthened. Equally, without efficient

161
Socio-Economic Benefits of IP Protection in Developing Countries

enforcement, counterfeiting and piracy could cause irreparable


harm to the inventors and innovators, the creators of works and
other rights owners, thereby hampering inventiveness and
creativity, and the growth of export-oriented, knowledge-based
industries, as well as causing damage to the information
industries.

For example, computer software products are quite


to piracy. Rising product development costs
vulnerable
combined with worldwide capability to rapidly and
inexpensively imitate, have raised the stakes for both the
victims and the perpetrators. A software package is expensive
to prepare but easy to copy. As investments needed for creation
of computer software are often high, the protection of such
software against unauthorized copying is of crucial importance.

One form of computer software piracy to be noted, for


example, is hard-drive loading by dealers using unauthorized
loading of software as an attraction and incentive for sale of
their computers. For this purpose the computer hardware dealer
does not ostensibly charge for the pirated software loaded in the
computer equipment being sold. This form of virtual software
piracy can be problematic when the rights owner has to prove
commercial or profit interest in such cases.

Here it may be mentioned that the Business Software


Alliance (BSA)-a trade association based in Washington,
D.C., in the United States of America, formed by leading
software publishers to eradicate illegal copying, sale,
distribution and use of computer software-has, since it was
founded in 1988, been active in carrying out anti-piracy
campaigns in respect of computer software in a number of
countries, including through public awareness building. The
total losses due to piracy in the computer software industry in
Latin America alone were recently estimated at nearly half a
billion US dollars.

t62
Chapter 10 Effective Enforcement of IP Rights

India's National Association of Software and Service


Companies (NASSCOM), for example, which is a kind of
chamber of commerce for the software industry in the country,
is also aggressively campaigning against software piracy. It is
helping create awareness about software piracy against the
individual users, and feels such awareness building would
further consolidate the country's development strength in
computer software and encourage creation of world class
products and packages for the global software market.
NASSCOM has reached an understanding with the Washington-
based BSA whereby both NASSCOM and BSA are jointly
campaigning against software piracy in India since July 1,994,
having started with a series of public awareness seminars, and
through sending thousands of mailers to inform people on the
risks of buying or using pirated software.

The anti-piracy "Hot Line" launched by NASSCOM in


Delhi has successfully facilitated raids on private centers since
July 1995. Future plans envisage launching of additional anti-
piracy hot lines in Delhi and proposed new hot lines in Mumbai
and Bangalore-search, seizure and prosecutions are facilitated
through information received via the hot lines.

It is essential to safeguard intellectual property rights


against being pirated. The ingenuity of commercial pirates is
boundless. It must be remembered that technology is a double-
edged weapon available to infringers as well. Pirate editions of
new products can come to the market at almost the same time as
the original. Thus in reality the lead-time is practically non
existent. A software-based society is burdened with the fate of
decreasing lead-times, and, if the legal system, which prohibits
copying, is not strengthened, the incentive for creating new
products is lost. Industry and enterprises in developing
countries need to be helped with stringent enforcement, else
investments could be adversely affected.

163
Socio-Economic Benefits of IP Protection in Developing Countries

Protection of intellectual property rights is also a sine qua


non for the development of the global information
infrastructure. In particular, the improvement of enforcement
procedures is an urgent need for helping and fostering creativity
and creative activity in a "networked" era. This is particularly
so, since on-line piracy constitutes a major threat to intellectual
property rights' holders. It is more profitable for the pirates,
more difficult to detect and has a borderless dimension.
Protected works can, with virtually the pressing of a key, be
transmitted to anywhere in the world, and be downloaded
without any authorization from the rights holders. The latter
will need equally to be afforded technological protection
through encryption, and it is essential to legally act and debar
the manufacture or sale of technological devices designed to
circumvent encryption.

The new WIPO Copyright Treaty (WCT) and WIPO


Performances and Phonograms Treaty (WPTT), mentioned
earlier, "obligate countries to make illegal the acts of
circumvention as well as the manufacture, importation and
trafficking in these circumvention devices. These laws will
become critical components in the fight against on-line piracy.
They must be incorporated into domestic law and enforced
through imposition of meaningful sanctions, including criminal
penalties for violations." Encryption and technological
safeguards for protecting intellectual property rights holders,
and declaring illegal their circumvention technologies, services,
devices, etc., would need to be effectively backed by
determined government action. "Countries must also have the
means and the will to locate sources of on-line piracy, raid and
shut down these locations, seize equipment involved in piratical
activities, alTest those engaged in serious commercial piracy and
impose deterrent penalties...E-commerce holds great promise,
particularly for developing countries, because it will provide
greater and quicker access to technology, information and
entertainment, will enable quicker and cheaper transfer of

t64
Chapter 10 Bffective Enforcement of IP Rights

technology...But without effective protection and strong


enforcement, these benefits are unlikely to be realized."31

Well-enforced legislation is, therefore, essential for


providing the necessary market-based incentives and rewards
needed to promote creativity, for encouragement of authorship
as well as for the growth of the concerned industries in the
information society.

It is interesting to note in this context that Article 7 of the


TRIPS Agreement, entitled "Objectives," states that "the
protection and enforcement of intellectual property rights should
contribute to the promotion of technological innovation and to
the transfer and dissemination of technology to the mutual
advantage of producers and users of technological knowledge
and in a manner conducive to social and economic welfare and
to the balance of rights and obligations." It is a "should" rather
than a "shall" provision. There is no corresponding statement in
the other international treaties/agreements dealing with
intellectual property.

Progress of technologies also has led to growth inthe


piracy of intellectual works. Piracy is criminal theft of the
creator's skill, production and investment. Technology is also a
double-edged sword available, through the very same
technological development, also to infringers. Far from being
deterred, therefore, piracy is becoming rampant.

Piracy is the reproduction for profit of the works of a


copyright owner without his permission. The pirate does not
publish a new book, song or performance; pays no royalties,
and does not differentiate between foreign and national works,
making both equally vulnerable.

33 Eric H. Smith, President,International Intellectual Properfy Alliance in his


presentation at the Berlin Congress of ALAI, June 18, 1999.

165
Socio-Economic Benefits of IP Protection in Developing Countries

Increasingly sophisticated copying and reproduction


material and equipment is also available with pirate firms, and
with their own research on ways to circumvent the law, it is
unrealistic to expect violations and infringement to vanish. Too
much money is involved in it. But efficient enforcement of the
law can effectively contain it. To be effective, the penalties
imposed upon convicted infringers must be sufficiently harsh so
that the sanctions imposed upon infringers do not merely
become an acceptable cost of conducting their illicit business.

Piracy of creative works which, as mentioned earlier, is


basically a theft has to be sternly checked, through, if necessary,
special anti-piracy squads in the police establishment and
through an enlightened judiciary that would pronounce prompt
and the maximum sentence under the law, in such cases.

That such piracy grows out of progress would be simple


enough to accept if it were a mere alliteration and had not
developed, propelled by new media technology, into a major
threat to creators, to publishers, to educational publishing, to the
indigenous national "cultural'o industry and generally to the
development of national and international creativity also in
literary and artistic works. It has to be eradicated, if an
important part of the cultural heritage is to be safeguarded.

Piracy of intellectual works is not to be confused with the


aura of the acts of enterprising buccaneers of two centuries ago;
today, equipped with and backed by modern telecommunication
and electronic technology, it is plain and simple theft. And, in
its staggering proportions, it is increasingly tending to become
an organized one on a scale that draws on gray and black areas
of financing-and in some cases at least, has all the trimmings
of an underworld activity with the involvement of organized
crime.

166
Chapter l0 Effective Enforcement of IP Rights

According to an estimate made some years ago by the


International Publishers Association (PA),' criminal book
piracy i.e., manufacturing of books without authorization from
the rights, and unauthorized translations was to the tune of over
US$l billion a year around the world; now the estimation is
that it is much higher, possibly closer to US$2 billion.

In addition, in respect of music, there has been a


proliferation of piracy almost worldwide with the figure for
1998 of pirated cassettes and tapes of sound and audiovisual
recordings in the global pirate music market, being over
2 billion units, worth an estimated at US$4.5 billion. Again, in
music, while there was hardly any CD piracy in 1989, according
to the estimates of the International Federation of the
Phonographic Industry GFPI),35 the extent of pirated CDs in the
market was 35 million units in 1992; it more than doubled to
76 million in 1993, increased to 90 million units in 1994, and to

The International Publishers' Association (IPA) was established in 1896.


It is composed ofnational, specialized and regional publishers'
associations, and has 74 member organizations in 65 countries spread
over all regions of the world (including about 30 developing
countries). Its headquarters is in Geneva. The IPA's objectives are to
uphold and defend the right of publishers to publish and distribute the
works of the mind..., provided that in so doing they respect all legal
rights attached to these works within their own countries and
internationally...; to promote and protect by all lawful means the
principles of copyright on which depend the encouragement of
authorship, publishing and dissemination of creative works and to
defend copyright against all infringement which may restrict the rights
of authors and publishers; to overcome illiteracy, the lack of books
and other educational material.
The International Federation of the Phonographic Industry (IFPI) with its
headquarters in London, is the organization representing the over
US$38 billion international recording industry. It campaigns for the
introduction, improvement and enforcement of copyright and related
rights legislation and coordinates the music industry's anti-pkacy
activities. IFPI represents some 1,300 record producers in over 70
countries around the world, including the six majors (BMG, EMI,
Polygram, Sony Music, Universal and Wamer Music).

167
Socio-Economic Benefits of IP Protection in Developing Countries

4ffi million units in 1998. Also according to the IFPI's June


1998 report on music piracy, 33%o of global music unit sales (of
a total of unit sales of just over 4 billion valued at nearly
US$39 billion in 1998) was pirated music. Incidentally, the CD
manufacturing capacity, which was stated to have risen by some
280Vo in the last five years, was around 16 billion units in 1998.

Piracy of software, according to the Business Software


Alliance's estimates of "stolen" software downloaded from the
Internet itself is US$l billion annually. The challenge of illegal
software being made available on the lnternet is thus enornous.

In view of the ever increasing and substantial economic


contribution of intellectual property as also its contribution to
education, culture, science and technology, the magnitude of
piracy and counterfeiting in respect of copyright, patents,
trademarks and other industrial property assets, needs to be
seriously tackled, again with the much needed political will, to
ensure strict enforcement of the law, and to provide
enforcement authorities with necessary legal authority as well as
to encourage them to conduct raids without the knowledge of
the infringer. Again, criminal proceedings while being fair
should be expeditious.

According to an estimate as far back as 1986, the cost of


this enormous piracy to the global economy was US$60 billion
in addition to loss of employment that it entails, which indicates
the dimensions of a problem of staggering proportions. Since
then, the extent of intellectual property violations has been
growing rapidly, and the international distribution of counterfeit
and pirated goods is increasing. More recent (1997) estimates
suggest that this activity accounts for some 5Vo to 8Vo of world
trade amounting to between US$120 to 150 billion, and has led
to the loss of hundreds of thousands of jobs.

The active support of governments is an important and


urgent need to help the efforts of concerned industries to combat

168
Chapter 10 Effective Enforcement of IP Rights

piracy, since piracy has become an ever increasing threat to


creativity, to the future of national authors, composers, artists,
film and record producers as well as to the software industry
and to creative invention and innovation. It deprives
governments in unpaid taxes and lost investment. In many
developing countries the enforcement agencies need to be
adequately resourced and effectively managed to deal with
piracy and with the pirate networks.

Strengthening also of regional cooperation in


enforcement of intellectual property rights and constant
exchange of mutual information to improve it would be an
extremely positive development and should be encouraged.

t69
CHAPTER 11

Institutional Framework I
Human Resource Development And
Awareness Building; Teaching Of
Intellectual Property; Inventors'
Associations; Intellectual Property
Institutes

As will be seen from what has been described earlier in


this context, the protection of intellectual property rights is
increasingly becoming a key factor in the national strategic
planning process for achieving sustainable socio-economic
development by improving the international competitiveness of
domestic industry and business, be it in the context of
technology transfer, international trade, identifying of new
markets in export trade and their retention, promotion of
national inventive and innovative activity, or assisting the
expansion and growth of small and medium-sized enterprises,

170
Chapter lL HRD; Inventors Associations; IP Institutes

and improving their links with university-based research.

There is already a growing recognition of the fact that in


order to benefit from these new directions, developing countries
need to improve all aspects of their regulatory frameworks, laws
and services, encourage scientific and technological creativity,
and modernize intellectual property infrastructure and
administrations so as to make them increasingly user-oriented,
as well as concentrating on human resource development
required for proper functioning of their national system of
innovation.

And yet, in a number of developing countries, there is a


lack of information or even misinformation concerning the
socio-economic value of intellectual property rights' protection.
Such protection is seen in certain circles as confined mainly to
patents in chemicals and pharmaceuticals. Here, to digress a
little, we are, and should be, concerned about the need to have
cheap medicines for the poorer sections of society, but this
should not mean that a large segment of our population be
deprived in cases of serious illness from being provided with the
latest, even if it be more expensive, life-saving drugs. It should
not be overlooked that most developing countries now have a
gtowing, dynamic, entrepreneurial, and consumerist middle
class which needs to be encouraged to obtain, and be provided
with the facilities for medical insurance coverage. This in turn
would encourage private hospitals equrpping themselves with
the latest facilities to cover treatment at a price. That could then
help release availability of our public sector health services to
deal with a much larger intake of those who cannot, at present,
afford medical insurance.

However, suffice it to repeat here that intellectual


property rights cover a vastly expanding area of patents,
trademarks, industrial designs, integrated circuits, copyright and
related rights. Also, the increasing possibilities now with the
developments of technology in the field of communication,

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Socio-Economic Benefits of IP Protection in Developing Countries

including the incorporation of binary language digital


technology, have prompted the necessity for a global legal
framework that would provide greater security and clarity in the
functioning and management of the protection of intellectual
property rights. New possibilities are emerging, for instance, in
the field of biotechnology, especially in genetic engineering,
which are raising not only ethical questions but also questions
concerning the need for protecting of traditional knowledge, as
well as the genetic resources that can be reproduced,
manipulated and exploited out of their natural environment.

If the big leap, which economic reform programs in


developing counffies foresee, is to be taken, then it is essential,
imperative and urgent that in intellectual property rights and
their protection, not only a progressive new thinking and culture
needs to be developed in business, research and development as
well as in university circles, but also the "mindset" among the
community at large needs to be changed through greater
awareness building.

Such awareness building has to be extended not only to


technocrats in industry, to the intellectuals in the universities
and the public at large, but also to the personnel in the police,
customs, and the judiciary who play an important part in
enforcement.

Economic growth, to be meaningful, must reach out to


the masses of the people. It should result in creation of job
opportunities, achieving a balance between quality and quantity
of such jobs. For this, the productive sector in developing
countries must become qualitatively competitive, and should
use in the process the latest technologies. Developing countries
should acquire relevant technologies for this purpose, but to
ensure that they get the latest and the best, they need to ensure
updated intellectual property rights legislation and its effective
and efficient enforcement.

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Much greater awareness building is, therefore, essential


about the socio-economic impact of strong intellectual property
rights protection, if the developing countries are to use the
intellectual property system optimally for their benefit. The
need for greater awareness-building is imperative when one sees
views being aired and positions taken and asserted, but little
studied, and through repetition, being accepted, owing perhaps
again to lack of detailed knowledge or precise information. As
the adage goes, there is no worse blind than one who does not
want to see.

Therefore, it is essential that greater awareness should be


created about the importance of efficient and effective
intellectual property protection and its impact on socio-
economic and cultural development. An intellectual property
"cultltre" needs to be deliberately promoted, which would
encourage intellectual creativity, and facilitate cross-fertilization
of ideas and help increase innovative and inventive activity
linked to market needs.

In the field of copyright, users of copyrighted works


should also be made aware about their legal obligations for
using such works. This is necessary because for a long time,
people have become accustomed to using protected music, for
example, in restaurants, bars, hotels, etc., without getting a
license for the use of such copyrighted material or paying for
such use.

Awareness material including audiovisual material on


intellectual property protection needs to be produced for
different categories of professionals, policy makers, as well as
for the general public.

In order to promote economic growth through technology


development with the aid of the intellectual property system, it
is essential, imperative and necessary that in respect of
intellectual property rights and their protection, the private

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Socio-Economic Benefits of IP Protection in Developing Countries

sector of business and industry needs to be made aware of its


techno-economic advantages in their trade promotion.

Awareness building programs should be held at the


national level periodically in order to help a progressive new
awareness in business, research and development and in
university circles as also to help the community at large through
greater information dissemination. These should cover, as
already mentioned earlier, not only technocrats in private
industry but also the intellectuals, the universities and the public
at large, as well as the police, customs, and the judiciary which
play an important part in enforcement. Specialization in
intellectual property amongst lawyers and judges is a very
necessary element.

The impofiance and usefulness of intellectual property


rights, its linkage with competitiveness in trade as well as with
economic and social development, needs increasingly to be
emphasized particularly amongst policy makers in government,
in the private sector, as well as amongst economists and
administrators.

In this context, a systematic and objective analysis of the


intellectual property system in every country should be a key
priority of the strategic planners and policy makers at the
national level. This analysis and study should be done in the
framework of the national system of innovation, so as to deal
with all related aspects that have a bearing on making the most
effective and efficient use of the intellectual property system for
national, social, cultural, technological and economic
development.

Intellectual property rights and their protection should be


included in the national economic agenda. It should form an
integral part of our economic policy, industrial policy, S&T
policy and educational policy.

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Likewise, the teaching of and research in intellectual


property law should become an essential part of the law
faculties in the universities, in institutions of higher learning, in
institutes of engineering, management and scientific research.

The need for intellectual property law teaching and


in developing countries,
research has to be fuither encouraged
with improved teaching programs and courses; improved
design, development and application of curricula on intellectual
property law; constantly updated teaching materials; structures
for organized research in the field of intellectual property;
contacts between professors and researchers; the increased role
of professors in the legislative process of adopting and revising
intellectual property laws, and with strengthening of links
between universities, technical institutions and industry.

It is also important to consider establishing/setting up of a


network of teachers and researchers in intellectual property
drawn from varied and multi-disciplinary backgrounds.

In 1979, WIPO had organized a round table of professors


interested in teaching of intellectual property law. The
International Association for the Advancement of Teaching and
Research in Intellectual Property (ATRIP), which was
established in 1981, stemmed from a recommendation that was
made at that round table meeting in 1979. ATRIP provides a
forum for professors and researchers to meet for discussions on
teaching and reseat in the field of intellectual property as well as
for keeping abreast of developments in teaching and curricula
and methods, in regard to topics for research as also changes in
intellectual property laws. But these are not enough by
themselves. Study visits to meet with professors in other
countries are also necessary. In the course of such visits,
curriculum planning and course content could be discussed and
teaching methods could be observed and studied. The
curriculum could provide for a basic course on intellectual

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Socio-Economic Benefits of IP Protection in Developing Countries

property law, as also courses dealing with particular subjects of


intellectual property law.

There is a dearth of teaching materials especially suitable


for use in the developing countries. It might be necessary to
make available to law professors in developing countries who
are planning and/or formulating curricula on intellectual
property law, necessary documentation which they could
examine and from which they could build the desired teaching
materials. That documentation could include also the laws and
regulations of other countries.

Preparations for introducing a course in the curriculum


take time. Much of the effort is directed to compiling teaching
material and reference sources on the law of intellectual
property. Since some guidance or even some starting material
was needed, WIPO published in 1988, a book entitled
Background Reading Material on Intellectual Property. This
book consists of a collection of reading materials on various
aspects of intellectual property law and administration, and is
intended for students in courses of studies at universities, in
particular by students in developing countries, who are most
affected by the unavailability of suitable teaching literature on
intellectual property. While primarily intended for students,
that book may also be of use as a reference work for
government officials, attorneys and business executives
concerned with intellectual property law or its administration.

As has been emphasized already, the development of


human resources is a strategic component of any effort aimed at
modernizing and effectively using the intellectual property
system. Teaching, training and research in the field of
intellectual property, should be a part of focused and policy-
oriented information sharing, designed to reach out to include
policy advisors, diplomats and technocrats in government as
well as in the private sector of business and industry.

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In this context, distance learning is a practical alternative


and a complement to traditional training methods in order to
make course materials accessible to larger audiences worldwide.
WIPO's very useful distance learning courses, for example, are
delivered primarily via the Internet and offer new teaching
methodologies, specially-designed course materials, evaluation
tools, and tailored means of delivery. Where appropriate,
videoconferencing sessions are organized to stimulate an
academic environment by linking remote sites. Courses are
specifically adapted to allow student-teacher interaction, student
tests, course monitoring, and on-line registration and evaluation
systems.

One of the advantages of WIPO's distance learning


program is that it increases the number and range of
beneficiaries of teaching and training programs. The web-based
teaching technique brings teachers specializing in intellectual
property issues closer to students and other interested parties in
all corners of the world. This means that anyone seeking more
information about intellectual property can follow a range of
educational programs in intellectual property at their own pace,
in their own space. For course participants, it can adapt to
different degrees of access to information technology
infrastructure a range of distance learning methodologies could
be used to suit the needs of specific target groups (from both the
public and private sectors) in different regions and countries,
catering to different degrees of access to information technology
infrastructure. Participants can communicate with world-
renowned experts regardless of their physical location. It further
ensures sustainability. Distance learning can ensure continued
support to students, both before and after the formal duration of
a course. This complements and reinforces the educational
experience obtained in traditional learning and training
programs.

User demand also determines training modules. Defining


the target audience helps to specifically design training courses

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Socio-Economic Benefits of IP Protection in Developing Countries

to complement existing introductory-level courses, ensuring that


the participants obtain optimum benefit. These training
modules are driven by the actual demand of diverse categories
of end-users, such as examiners, patent and trademark agents,
legal practitioners, and administrators in collective management
societies. Specialized distance learning courses could be
targeted at defined groups and focus on specific subjects, such
as TRIPS obligations, electronic commerce, protection of
indigenous knowledge and folklore, and intellectual property
implications in areas of biotechnology research and
commercialization. By monitoring the website database, the
actual number of users of distance learning courses can
be evaluated, and new users attracted by providing new
information and training materials, and maintain ongoing
student-teacher interaction as a follow-up to the training
experience.

Networking and cooperation agreements with other


institutions involved in the teaching of intellectual property and
distance learning help in order to combine substantive
knowledge and pedagogical expertise in the design and
development of courses. Partnerships with universities around
the world enables identification of core groups of experts to
serve as authors and instructional designers, and to adapt text-
based teaching materials into distance learning courses. Other
experts could serye as core faculty and tutors to teach, monitor
course delivery, and provide student-teacher communication.

WIPO, to mention as an example, is cooperating with the


University of South Africa (UNISA) to create a specific study
course on intellectual property, carried out by distance learning,
that will lead to the award of a joint WIPOAINISA diploma or
degree. More intensive, face-to-face training courses will also
take place in UNISA's residential campus facilities. UNISA
has been teaching intellectual property law for more than 60
years. Founded in 1873, it is South Africa's largest university
and has been solely devoted to distance learning since 1946.

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Among UNISA's famous graduates is former South African


President Nelson Mandela.

The frontiers of intellectual property are being pushed


ever increasingly forward with the advancement of science and
technology. More and more issues are emerging requiring
protection to encourage scientific pursuits and investments
therein. Discovery and creation of industrially useful
microorganisms are some recent examples in the field of
modern biotechnology. The teaching also of these new frontiers
of intellectual property should also be included in the law
faculty curricula in universities and educational institutions.

It may be added here that to keep pace with socio-


economic development and progress, the developing nations
and their enterprises would need to trigger inventions,
innovations and creativity. Experience has shown that national
creativeness can confribute effectively to technological progress
only if it is matched by encouragement and legal security for
inventors.

The promotion of inventiveness through effective


protection of intellectual property has a highly beneficial effect,
and it is important that every country should encourage it in a
systematic manner, since promotion of indigenous inventive and
innovative activities are an indispensable means of achieving
international competitiveness. The role of institutions
concerned with the promotion of inventions and other
technological innovations is of prime importance in this respect,
and an association of inventors is one of them. It represents the
collective interests of its members and promotes their activities.
An inventors' association gives inventors the opportunity of
interacting among themselves and sharing their experience of
research and development as well as ways of marketing their
inventions.

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Socio-Economic Benefits of IP Protection in Developing Countries

Governments in developing countries should consider


helping in setting up and supporting the activities of a national
inventors' association, and where such an organization or
association exists, in helping to strengthen its infrastructure in
being supportive of invention and innovation promotion as also
in providing advice and guidance to inventors in their work.
Such an association could be on the model of similar
associations in a number of countries (over 80 or so) including
in over 41 developing countries. Such a national inventors'
association should preferably be headed by an eminent scientist,
inventor or researcher of repute and should be geared to help
inventors particularly in commercializing their inventions, an
important area in which national inventors need to be guided
and assisted. Such an association should also be encouraged to
become party to the International Federation of Inventors'
Associations (IFIA), so that it could interact with other similar
member associations and share their experience in invention
promotion as well as in assisting the commercialization of
inventions at the national and international levels.
Governments, industry, organizations and inventors'
associations could consider encouraging clubs and societies at
the state and/or district levels to tap individual inventive effons
among women and youth and to promote useful ideas from
technical and even non technical staff of, inter alia, the SMEs
on improving existing products and processes.

Finally, developing countries, such as those that do not


have these yet, might consider the setting up of a national or
sub-regional institute of intellectual property. Such institutes
need to be assisted by the governments concerned, but should,
preferably, be established and developed by the national
chambers of commerce and industry. Only then will these
institutes be by enterprise, largely for enterprise, and of
enterprise. Initially the governments could help by providing
suitable accommodation and funding to set them up.

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Chapter 11 HRD; Inventors Associations; IP Institutes

An institute of intellectual property should, with the rapid


progress in, and great diversity of, new technologies such as
computer software, innovative semiconductor, integrated
circuits, biotechnology etc., help also in the development and
promotion of greater awareness amongst policy makers in
developing countries about the impact of these and other
emerging technologies on the framework of protection of
intellectual property. It should serve the functions of an
awareness building institution, as well as a think tank for
mooting policy options and initiatives. It could, in addition to
producing its own research papers and monographs in the areas
of technology management and intellectual property
development, make a positive contribution to general awareness
and human resource development through regular orientation
courses for which a fee could be charged. Such courses could
extend from three days to 10 days depending on the level of the
participants. They should be designed, among others, for
technocrats at various levels in different industries so that an
increasing number of such personnel are made au fait with
various practical aspects of the use of intellectual property
rights; (ii) the legal profession including patent and trademark
attorneys; (iii) the enforcement agencies including the customs
and police; (iv) concerned officials dealing with or required to
contribute in policy making in intellectual property matters from
the ministries required to deal with this, namely, external
affairs, commerce, industry, human resources development,
education and culture etc.; (v) selected officials from industry
associations, chambers of cofilmerce, associations of
pharmaceutical industry; (vi) concerned research personnel in
R&D institutions, institutes of technology, and university
research centers, (vii) professors from law faculties in
universities to discuss, for example, the teaching of intellectual
propelty law, devising optimal curricula and producing relatable
teaching materials which focuses on research into various
problems related to intellectual property, systematic collection
and distribution of information pertaining thereto as also
promotion of international exchanges. Through providing these

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Socio-Economic Benefits of IP Protection in Developing Countries

services, the institute should to contribute towards better and


enhanced protection of intellectual property and open the way
for international adjustments and coordination of the intellectual
property system.

There are examples of such institutions also in developing


countries, for instance, the Republic of Korea's International
Intellectual Property Training Institute (IIPTD referred to earlier
(p.ll2, Chapter 6), which was inaugurated on May 8, 1991.

It was one of the first among training institutes of its kind


in the developing countries of the Asian region. In order to
conduct more effective and systematic human resource
development activities, the IIPTI has been equipped with
modernized facilities and is located in Daeduk Science Town in
the Taejon city area, a hub of development of science and
technology in the Republic of Korea, which has over 60 private
and public institutions including universities. The IIPTI has
played a central role in the development of human resource in
the intellectual property field by providing diversified and
quality training programs, meeting the ever-changing demands
due again to the rapid development of technology. Up to 1998,
for instance, the number trainees had reached 30,000, including
900 foreigners. In order to provide world-class quality training,
the IIPTI closely cooperates with training centers, research
institutes and international organizations as well as agencies of
the UN system such as WIPO.

In China, the government, has setup the China Intellectual


Property Training Center (CIPTC) which is under the Chinese
Patent Office (CPO). It is a training institute for personnel
specializing in the field of intellectual property and undertakes
systematic and professional training in this field. It is a national
institute combining teaching, academic research and awareness
building in the practice of intellectual property. Internationally
well-known experts and scholars of intellectual property are
also invited to lecture at the CIPTC.

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Chapter 11 HRD; Inventors Associations; IP Institutes

There is also the more recently set up Institute of


Intellectual Property Development (IIPD) in India. It was
established at the initiative of the Federation of Indian
Chambers of Commerce and Industry GICCD and has as its
Chairman, an outstanding entrepreneur and leader of a
pharmaceutical industry and research foundation. Among
others from the governing council of this IIPD are a very
eminent, world-renowned scientist, as also the Secretary
General of FICCL a well-known economist. The main objective
was to set up a world class institute to undertake research in
intellectual property rights issues, and to establish, maintain,
and manage a center of excellence to promote the knowledge of
IP law in the country as well as IP systems of other countries. It
has endeavored to sensitize the public on various issues that
directly impact on technological competitiveness.

In Malaysia, an Intellectual Property Center (IPTC) was


established in May 1997 , as a first step towards setting up of a
National Institute for Intellectual Property Training. The IPTC,
managed in close cooperation with the Intellectual Property
Division, of the Ministry of Domestic Trade and Consumer
Affairs, aims at providing effective and quality training for
developing national expertise in the field of intellectual
property. The programs of the IPTC, which also liaises with the
Malaysian Intellectual Property Association (MIPA), are
intended to benefit patent agents and lawyers dealing with
intellectual property, public sector officials involved with
intellectual property issues and enforcement, the judiciary, the
industry and the private sector as well as academicians and
researchers.

There are also the much older institutions such as (i) the
Max Planck Institute for Foreign and lnternational Patent,
Copyright and Competition Law established in 1966 in Munich,
Germany; (ii) the Center for International Industrial Property
Studies (CEIPD established over 30 years ago in the University

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Socio-Economic Benefits of IP Protection in Developing Countries

of Strasbourg, France; it was formed at the instance of industry


and serves it in respect of related industrial property studies;
(iii) the Common Law Institute of Intellectual Property in
London, United Kingdom; (iv) the Japan Institute for Invention
and lnnovation (JIII) in Tokyo, which has played an important
role in the development of modern Japan through awareness
building, spreading of patent information, research and training.
The Institute of Intellectual Property established in Tokyo in
June 1989, which focuses on research into various problems
related to intellectual property, systematic collection and
distribution of information pertaining thereto as also promotion
of international exchange. Through providing these services,
the Institute intends to contribute towards better enhanced
protection of intellectual property and open the way for
international adjustment and coordination of the intellectual
property system.

184
CHAPTER 12

Conclusion

In conclusion, it may be mentioned that in the 21"'


century, the economic growth of developing countries, as
indeed also of the developed ones, will depend on the
international competitiveness of their economy, industry and
business. Such international competitiveness, in turn, will be
driven by knowledge-based technological progress, which can
be achieved only through a well functioning national system of
innovation that has as its core, a strong, modern and well
enforced intellectual property system.

To recapitulate, some of the policy considerations and


directions for ensuring the strengthening and promotion of the
use of the intellectual property system by governments and by
the private sector, for technological and socio-economic
development, would therefore be as follows:

(1) A modern intellectual property system is an


essential component of the enabling environment for

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Socio-Economic Benefits of IP Protection in Developing Countries

technology-based economic development. Effectively managed,


the system has considerable economic value, since intellectual
property signifies advancing knowledge in the form of new
ideas, techniques, designs, processes and products having
economic and commercial potential. The socio-economic
benefits stem from theenhancement of
qualitative
competitiveness through use of the system which is a critical
tool in national development.

(2) National intellectual property legislations should be


modernized, constantly updated and refined to keep apace with
international developments and the needs of emerging
technologies. They should provide for stern penal provisions
against infringements and against piracy and counterfeiting.
Their strict enforcement should be ensured. The ultimate test of
the efficacy of a modern legislation lies largely in its effective
enforcement through strengthening of the enforcement
mechanisms. Strong intellectual property protection with
adequate and modernized legislation and its effective
enforcement is essential for ensuring economic growth.

(3) Setting up of a separate agency for enforcement of


intellectual property rights, or possibly a special court, could be
considered by developing countries. Also the earmarking of
police cells should be considered for antipiracy action both at
the country's capital as well as at provincial levels for
strengthening enforcement. The police, the judiciary and the
customs administrations need to be made aware of their
important role in enforcement of intellectual property rights.
An integrated approach between the right holders, the national
administration for intellectual property rights, the police, the
customs and the judiciary is essential for the effective protection
of intellectual property rights. Enforcement agencies in
developing countries need to be adequately resourced and
effectively managed to deal with both piracy and the broadbased
pirate networks, in order to protect national authors, composers,

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Chapter 12 Conclusion

artists, film and record producers, and the software industry, as


well as invention and innovation.
(4) The national and regional patent and trademark
offices and their infrasffucture should be proactively
modernized and computerized, taking steps to make them
responsive, user-oriented and helpful in rendering quality
services to all categories of their clients, and to meet the
growing demand of their users.
Cost effective and efficient search and examination and
registration procedures in respect of patents and trademarks
applications should be ensured.
Their administration might be made autonomous and self-
financing, with suitable increase in fees, where considered
necessary.
The patent and trademark office should have at its helm, a
director general or commissioner who is dynamic, capable, high
level administrator-cum-technocrat.

(5) A modern, user-friendly and value-added patent


information service must be geared to support invention
promotion. Systematic use of patent information by research
and development institutions and business enterprises needs to
be encouraged in view of its unique ability to provide direction
and clues for solving technological problems through research
and development and licensing.

(6) In the field of copyright, collective management


through a national society of authors and composers, with a
modern computerized administration, should be set up and,
where it exists, should be strengthened and placed under a high
ranking director general, for collection and distribution of
copyright royalties to the creators of works. It should protect
not only musical works but also authors' and performers' rights.
Its administrative costs should be kept minimal through
computerization and constant modernization. While the
importance of collective management is beginning to be

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Socio-Economic Benefits of IP Protection in Developing Countries

appreciated in developing countries, its great potential is yet to


be realized.

(7) An oversight body, advisory commission or


interministerial steering group should be set up at the national
level. It should draw up a national intellectual property policy,
which should have a specialist study group to review national
and international developments in the area of intellectual
property in order to keep the government advised.

(8) Targeted awareness building campaigns,


emphasizing the role of intellectual property in technological
and economic development, should be accorded the necessary
priority, as lack of credible information about the importance of
intellectual property often leads to a negative mindset among
important sectors of public opinion. Industry and business
should be encouraged to use the intellectual property system in
furthering their techno-economic capability through
introduction of the latest and newest technologies.

(9) The small and medium enterprises (SMEs) sector,


which plays a very important role in providing considerable job
opportunities, is still largely unaware of the implications of
intellectual property rights protection. Much worse, many
prospective inventors and innovators amongst the technocrats
and employees in the SMEs sector are unaware of the basic
parameters of intellectual property laws and regulations.
Awareness building in this sector should also be given a
priority.

(10) Teaching of intellectual property in law faculties of


universities and institutions of higher level in developing
countries, should be encouraged and promoted in order also to
equip future patent attorneys and lawyers with the necessary
skills in helping to implement intellectual property rights.

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Chapter 12 Conclusion

(11) Governments could launch a promotional public


relations operation to better inform the general public through
utilization of the mass media.

(I2) While awareness building at the national level


should, in the future, be left to the concerned national ministries
and institutions or institutes to conduct, international assistance
and programs, particularly by specialized agencies of the United
Nations system like WIPO, might lay greater stress on concrete
deliverables, such as program implementation and infrastructure
development to ensure sustainability about use. Subregional,
regional and international awareness building courses and/or
brainstorming seminars/symposia amongst policy makers in
developing countries might and could be left to be
institutionalized in training concepts like those of the WIPO
Worldwide Academy.

(13) Since techno-economic development and growth,


to be meaningful, must reach out to the masses of the people,
and should also result in job opportunities, it is essential to
make business and industry qualitatively competitive, using in
the process the latest technologies. Transfer of the latest and the
best technologies to enterprises in developing countries is
facilitated by a national system of strong intellectual property
rights protection and its effective and efficient administration
and enforcement.

(14) Industry and business should encourage competent


technocrats and scientists to invent; and even if it takes time, to
come up with new inventions which, when tested for industrial
applicability, would not only result in a competitive product but,
if possible, have a price edge. It is important, in fact imperative,
to encourage inventiveness generally amongst the nation's
youth.

(15) For competitiveness in international trade, the


industry and enterprises, big and small, would increasingly need

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Socio-Economic Benefits of IP Protection in Developing Countries

research-based innovation which should aim at using the initial


transfer of technology to originate worthwhile indigenous
technology. Innovative efforts should be encouraged by using
the intellectual property system, in order also to help creation of
new markets and new customers.

(16) Dynamic, interactive links between industry and


research and development institutions (whether publicly funded
or private) as well as research-based departments in universities
should also be encouraged and strengthened.

(17) To help national inventors, innovators and creators


of works, accession is recommended by states not yet parties to
the international copyright and industrial property treaties.
In respect of copyright, these are the Beme Convention
for the Protection of Literary and Artistic Works, and the two
treaties adopted in 1996 viz. the WIPO Copyright Treaty
(WCT) and the WIPO Performances and Phonograms Treaty
(!vPPr).
In the field of industrial property, it is the Paris
Convention for the Protection of Industrial Property and its two
subsidiary treaties, namely, the Patent Cooperation Treaty
(PCT) and the Madrid Agreement Concerning the International
Registration of Marks and its Protocol. The two latter
subsidiary treaties will greatly benefit inventors, enterprises and
trade by making protection available in a number of designated
countries without incurring separate registrations and translation
charges in each country where protection is sought. There is
also the Hague Agreement Concerning the International Deposit
of Industrial Designs and its latest (1999) Geneva Act, which
later maintains the basic characteristics of the Hague system
viz., simplicity and cost effectiveness. As in the Madrid system,
the international procedure under the Hague system alleviates
the task of offices of the Contracting Parties and provides them
with substantial revenues.

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Chapter 12 Conclusion

(18) Protection of folklore, traditional knowledge,


biodiversity and biotechnology needs greater attention in, and
by, developing countries.

(19) The development of information technology,


electronic commerce, digital transmission and the Internet are
examples of rapidly emerging new technologies. With the
increasing growth of e-commerce and expansion of the Internet,
measures would be needed to constantly deal with intellectual
property issues connected therewith and to ensure their
continuing development through and alongside with effective
protection of intellectual property rights. This will help secure
invention, innovation and creativity promotion, as well as
maintain and strengthen the stability of the operating
environment.

(20) Some of the progressive developing countries are


introducing information technology (IT) legislation and setting
rules for cyberspace to facilitate e-commerce and e-governance.
The 21"' century will witness an increase in knowledge
management in the context of multiplication of knowledge-
based industries.
Cyber legislation, rules and regulations will be necessary
for facilitating growth of information technology industries and
e-business ventures in a rapidly networked and integrated world
and in an expanding market for Internet services.
A proactive role by governments in developing counffies
to ensure effective intellectual property rights protection and
monitoring of infringements of these rights with effective
enforcement mechanisms will be essential both for developing
of e-commerce and for intellectual property rights protection.

(21) A national inventors' association should be set up


on the model of such associations in a number of countries,
including in developing countries, with an eminent scientist or
inventor as its head, and should, inter alia, help inventors in
getting their inventions registered as patents and, more

t9r
Socio-Economic Benefits of IP Protection in Developing Countries

importantly, in commercializing such inventions. There is the


need for a strategy also for exploiting of patented inventions.

(22) Authorities concerned in both goveflrment and


industry should consider assisting in the setting up of a
national/sub-regional institute of intellectual property, which
should serve as an awareness building institution and a think
tank for mooting policy options in respect of intellectual
property rights.

To sum up, developing countries should, in the process of


and quest for socio-economic development, use the intellectual
property system as a number of other countries have done, and
are doing, in order to sustain and constantly endeavor for
technology-based growth. Clearly the way ahead depends on
international competitiveness based on quality production for
the national and export markets. A competitive industrial and
business sector is critically dependent on a well-functioning,
strong and cost-effective intellectual property system at the
national level.

192
INDEX

133, 134, 135, 136, 137, 15 1,


t52, t57, 158, 165, 168, 171,
A T73,187,190
collective management of
ATRIP, 175 copyright, 45, 97, 99, 132,
r33, t34,136,178, t87
copyright law, 1 1, 35, 37, 61,
B 62, 66, 67, 68, 69, 7 0, 82,
154, 183
Background Reading Material on
Copyright Cultural Industry, 41,
w,176 50, 56, 57, 59, 60, 64, 70, 7 l,
Beme Convention, 37, 81, 82,
72, 73, 7 4, 7 5, 79, 80, 101,
140, 149, 150, 156, t57, lg0
148, 166
Book publishing industry, 61,64,
65, 67, 68, 70,'7 1, 7 5, 76, 77,
78,79 D
British Copyright Council (BCC),
v,58 Digital Technology, 52, 53, 54,
Business Software Alliance 55, 91, 93,95,98, 100, 151,
(BSA), v, 60, 65, 66, 69, 74, 172
75, 105, t62, 163, 168, 169 Domain names, 27 ,28,30,32,33,
103
Country code top-level
c domains (ccTLDs),30
Generic top-level domains
China Intellectual Property (gTLDs),30
Training Center (CIPTC), 182 WIPO Intemet Domain Name
Common Law Institute of IP, 184 Process, 32,33
Copyright, 10, 11, 12,35,36,37,
38, 39, 72, 73, 76, 79, 79, gt,
82, 88, 91, 93, 94, 96, 98, 99,
100, 101, 126, 127, t3t, r32,

193
Information Superhighway, 54, 94
E Information Technology (IT), 39,
48, 56, 57, 61, 62, 63, 66, 73,
Economic value of IP protection, 75,77,92,144, fi1,191
38, 41, 42, 44, 45, 46, 47, 48, Institute for Intellectual Property
50,118,171,186 Training (IPTC), 183
Electronic Commerce and IP,7, Institute of Intellectual Property
29, 85, 88, 89, 90, 100, 101, Development (IIPD), 183
toz, to3, 104, 106, 151, 178, Interim Board of Internet
t9L Corporation of Assigned
Names and Numbers
(rcANN),33
F
International Association for the
Advancement of Teaching and
Folklore, Indigenous Culture and
Research in IP, 175
Traditional Knowledge, 50,
International Confederation of
80,81,83,84
Societies of Authors and
Foreign Direct Investment (FDI),
Composers (CISAC), v, 133
2,3,5,70,76,78
International Federation of
Inventors' Associations
G (IFIA), 180
International Federation of the
ll, 28, Phonographic Industry GFPI),
Geographical indications,
29,39, 127, 128 74, t67
International Intellectual Property
Alliance (IIPA), v, 87
H International Intellectual Property
Training Instifute (IIPTI), 112,
Hague Agreement, lO3, 147, l9O t82
International Pub lishers
Association (IPA), v, 7 l, 73,
I 167
lntemational Publishers
Industrial designs, 10, 11,21,22, Copyright Council (IPCC), 96
39,47, rO3, 127, L47, 17l, Internet Assigned Numbers
190 Authority (IANA), 88
Industrial Property, 25, 28, 42 Inventors' Association, 170, t79
Center for Intemational IPR court, 69
Industrial Property, 183
industrial property protection, 34,
137 J
Industrial property protection, 1 6,
46, 8t, 91, 101, tt0, tt2, tr3, Japanese lnstitutes, 48, 127
14, 1 18, 126, t28, t40, t4t,
1
142, r52,156, 168, 183, 190
Industrial Property protection, 35

t94
L S

l.ayout Designs of Integrated Small and medium-sized


Circuits, 33,34,127, 128,171, enterprises (SMEs), 3,47,ll2,
181 180,188

M T
Madrid Agreement and its Trademarks, 10, I 1, 22, 23, 24,
Protocol, 23, lO3, L4O, 147, 29, 30, 39, 47, 66, 103, 109,
190 tt6, t27, 128, 138, 146, t47,
Max Planck Institute, 183 157,158, 168,171,187
Member States, 7, 9, 14, 26, 27,
33,35, 100, 142, 146
U

N Unfair Competition, 17, 34, 157


Union for the Protection of New
National Association of Software Varieties of Plants (UPOV),
and Service Companies t9,2t
(NASSCOM),62, 163 United Nations Conference on
National Office of Copyright Environment and
(ONDA),72 Development (UNCED), 121
United Nations Educational,
Scientific and Cultural
P Organization (UNESCO), 61,
82
Paris Convention, 25, 2'7,28,29, University of South Africa
31,34, 127, 140 (UNISA), 178
Patent applications, 15, 16, 119,
t30,143,144
Patent Cooperation Treaty (PCT), V
15, 16, 103, 140, t4t, t42,
t43,t44,145,190 Vision and Strategic Direction of
Plant varietyprotection, 18, 19, WIPO,8
2t, t26, tzg
W
R
WPO Arbitration and Mediation
R&D institutions, 45, 110, 181 Center, 104, 158
Rajiv Gandhi Institute for WIPO Copyright Treaty (WCT),
Contemporary Studies 55,75, 100, 103, t48,149,
(RGTCS),61 150,151, t64,r90
Role of Copyright in Cultural and WPO Internet Domain Name
Economic Development, 6l Process,31,33

19s
WIPO Performances and WIPOnet, 102, 103
Phonograms Treaty (WPPT), World Bank, 3, l2l,l29
55, 100, 103, 148, 149, 150, World Customs Organization
151, 190 (WCO), 161
WIPO Performances and World Health Organization
Phonograms Treaty (WPm), (WHO), 128, 130
75,1& World Wide Web, 86,87,91
WIPO's Distance Learning
Program, 102,177

196
ABOUT THE AUTHOR
Mr. Shahid Alikhan, a national of India, is
a former civil servant who served in
senior capacities in various ministries of
the Government of India and led Indian
delegations to a number of meetings of the

ft Commonwealth Secretariat and United


Nations Agencies before his secondment
to the World Intellectual Property
Organization (WIPO) in Geneva.
In WIPO, he served as a Director for a decade, until his
election as Deputy Director General in 1988. ln 1992, he was
elevated to the rank of Undersecretary General in the United
Nations.
An internationally known authority on intellectual
property, Mr. Alikhan has authored numerous articles and
papers in eminent professional journals as well as in a few
books on various aspects of the subject.
Monographs written by him on different aspects of
intellectual property rights have been published by the Rajiv
Gandhi Institute for Contemporary Studies, the Indian Institute
of Foreign Trade, and by UNESCO.
Over the past years, Mr. Alikhan has been invited to
preside over, moderate and address diverse audiences in a
number of seminars in India and abroad, organized, among
others, by the Government of India, WIPO, UNESCO, the
British Copyright Council, the Strasbourg Center for
International Industrial Property Studies (CEIPI), the Korean
International Intellectual Property Training Institute (IIPTI),

t97
the All-India Management Association, the Federation of Indian
Chambers of Commerce and Industry, the Confederation of
Indian Industries and Indian Universities.
Mr. Alikhan is on the Governing Council of the Indian
Instititeof Intellectual hoperty Development, a senior
(Honorary) Adviser to the World Association of Small and
Medium Enterprises, a member of the Editorial board of the
monthly Journal of Intellectual Property Rights of the National
Institute of Science Communication in New Delhi.

198

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