Trade deals are increasingly being used to ensure stronger patent protection and continued unfair profits for MNCs.
India must reopen the discussion on balancing the global intellectual property system.
What are the problems with the current trade deals?
Deals - The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) was signed in 1995 with the backing of WTO.
For the first time, it embodied an international regulatory regime for Intellectual Property Rights (IPR) in 1995.
Many nations have since promoted excessive protection of private investor interests through bilateral trade agreements.
Lobbying - Corporate lobbies have continued to pressure both home governments & abroad for increased protection of IPRs.
Countires like US have also been using bilateral trade agreements to ensure that its companies have strong IP protections abroad.
These moves have often gone against the wider public interests.
Evolving Designs - While patent protection is getting stronger, the conditions for its grant are becoming greatly relaxed.
Consequently, with little show of original effort, patents can now be claimed on all possible inventions that are of relevance.
Therefore, a successful firm of today is not one with the greatest technological breakthroughs but one that has a large IP portfolio, and thrives on licensing revenues.
What does the UNCTAD say?
The UN Conference on Trade and Development's recent “Trade and Development Report” calls for stronger measures to protect sectors against the undue domination of large companies.
It argues that high profits attributed to the present IP regime may be a sign of a sickness and calls for reforms.
The report also warns against trade deals that seek to protect the status quo and has identified patents as an instrument of unfair market power across markets.
It shows that patent reforms have led to significant increases in the rates of return to affiliate companies of foreign MNCs when compared to locally headquartered companies.
What are the concerns for India?
For India, the fate of its pharmaceutical and software sectors swings in the balance as foreign companies in these sectors account for most of the transfer of profits across borders.
Guaranteeing a fair competition will be critical to ensure that we do not lose more ground to global companies abroad and at home.
Our high-tech sectors are already taking a beating as they presently operate in a volatile global environment.
Supporting IP standards that simply follow a ‘winner takes all’ ideology without emphasis on technological advancement and competitive markets will be a regrettable mistake.
How does the future look?
Fair Stance - India needs a clear and tough stance on intellectual property both in domestic policy and at the multilateral level.
Support for innovation has to be accompanied with instruments that guard local companies against the misuse of market power, coercive bargaining and aggressive acquisition strategies.
WTO conference - The WTO Ministerial Conference that is coming up in Argentina this December is expected to take up patents issues in a big way.
There are ongoing attempts by big businesses to push for new rules in areas such as e-commerce.
Other proposals being made will largely involve limiting the ability of governments to constrain corporate behaviour.
India in WTO - We need therefore to drop our pretence regarding IP and return to old-fashioned pragmatism.
This would clearly show that India recognises the fallacy of the current IP system and that it desires to broker a new global deal.
India should also take up the forgotten issues of the Doha Round.
