The devils called Patent & FTA
Will innovation and IPR suffer if technology is patented?
June 1, 2006
What do you see when countries negotiate in the bilateral and multi-lateral trade agreements? I see perpetual catching-up in economic divides if we are not careful when dealing with issues that involve patents, copyrights and intellectual property rights.
That said, it’s quite disturbing to hear that Malaysia will pass the Patents Act (Amendment) Bill as the country has decided to accede to the Patent Co-operation Treaty (PCT) by the end of 2006.
As it is, apart from the PCT, Malaysia is also acceding to three additional treaties of the World Intellectual Property Organisation (WIPO), namely the WIPO Copyright Treaty (WCT), the WIPO Performances and Phonograms Treaty (WPPT) and the Budapest Treaty on the International Recognition of the Deposit of Micro-organisms for the Purposes of Patent Procedure, or in short, the Budapest Treaty.
Patents can be easily related to escalated costs in building quality of life, and there is sufficient evidence to support this argument, with patented medicines as a solid example. Patented anti-retrovirals administered on AIDS patients used to be US$15,000 per patient per year. The generic versions, which are just as safe and effective, are US$150 per patient per year.
In the recent past, we have seen how the United States has been updating its copyrights protection laws vis-à-vis its trading partners. An example is the general extension of the term of protection from 50 years to 75 years. In the specific case of the US-Oman FTA, copyright extension is stretched to 90 years. Perpetuality means absolute monopoly on extended terms.
It is generally accepted that there is a super economic power bloc driving these four treaties. Such dominant drivers may take the forms of industry lobby groups, direct demands by certain developed countries’ governments, and even the WIPO Secretariat. The obvious is that the United States has been insistent on including these four treaties when it is engaged in bilateral free trade agreements with its trader partners. The rationale is that developing countries like Malaysia must assume more legal obligations as globalisation kicks in.
However, people in the technology industry are concerned that Malaysia has rushed into acceding to the four WIPO Treaties when we have not adequately mapped out a National Intellectual Property Policy that embraces and protects the collective interests of the nation in the field of technological innovation.
Let’s not forget that WIPO has entrenched its dominance subsequent to the Uruguay Round in the 1980s. WIPO had led industries in developed countries in lobbying for the inclusion of intellectual property in the negotiation of trade agreements. This precipitated in the adoption of the Trade Related aspects of Intellectual Property rights Agreement (TRIPS). All members of WTO, of which Malaysia is a signatory, have to accept the TRIPS conditions by default.
The immediate outcome is that a lesser powerful economy, like Malaysia, has to bear with more expensive medicines, educational materials and more licensing and royalty payments for the use of technologies. The arithmetic is simple.
According to a World Bank study, this has translated into a hefty cost of some US$60 billion a year for developing countries to implement TRIPS. The beneficiaries to receive patent rents mandated by TRIPS, according to a World Bank report in 2002, are the US, Germany, Japan, France, UK, Switzerland and several others, raking in a total of US$41 billion. In contrast, developing countries that will incur major annual net losses in patent rents include South Korea, China, Mexico, India and Brazil, just to name a few.
It must be stated that the implementation and enforcement of TRIPS standards remain within national jurisdiction. In the case of patents, the basic rule and practice is that applications are made to national patent or IP offices, and these offices will then examine and decide whether a patent can be granted, in accordance with the criteria of novelty, inventive step and industrial applicability of the invention.
A good model of such regional IP offices is the EU. There is a regional patent treaty, with one patent office, taking care of the interests of the patent owners vis-à-vis the patent subjects. This protection is, however, non-existent in ASEAN as a regional group, hence Malaysia has to resort to national patent office to protect its interest, and this is where our fault line lies. We do not have a national IP or patent policy though we have long been a signatory to the Berne Convention that governs copyrights issues in the protection of Literary and Artistic Works.
Since Malaysia is banking on technology as a key economy driver under the 9th Malaysia Plan, let’s focus on the area of digital technologies, especially those related to the Internet and ICT. The relevant treaty is the WIPO Copyright Treaty, or the WCT. It is here that starkly exposes our vulnerability in securing a foothold in technological innovation.
I spoke to several respected software engineers, including those who innovate using Open Source to create generic technologies that may provide the same functions of digital applications and software performed by the patent-protected genres. When patents are enforced, void the WCT, these Open Source people stand the risk of getting arrested for violating the FTA, and should they be arrested in the US, they will be charged under the US legal regime.
How do you like that?